CBIC starts process of Recovery of ineligible Input Tax Credit [Read Circular]

The Central Board of Indirect Taxes and Customs (CBIC ) has started the process of Recovery of ineligible Input Tax Credit (ITC ) in Kerala.

In a Circular issued by Board, Thiruvananthapuram directed to recovery the ineligible Input Tax Credit is to be initiated immediately and an Action Taken Report and results achieved in this regard are to be furnished to the office.

Section 16(4) of the CGST Act, 2017 prescribes that “A registered person shall not be entitled to take CBIC input tax credit (ITC) in respect of any invoice or debit note for supply of goods or services or both after the due date of furnishing of the return under Section 39 for the month of September following the end of Financial Year to which such invoice or invoice relating to such debit note pertains or furnishing of the relevant annual return, whichever is earlier.”

For FY 2017-18, the same was linked to last date of submitting FORM GSTR- 1 (extended up to 10.04.2019 for regular Taxpayers and 30.04.2019 for the Taxpayers eligible to file GSTR- 1 Statements quarterly), For 20 1 8- 19, the last date of availing of credit thus was 20.10.2010, As such, if any of the registered persons were to file any return in respect of the last two financial years (2017-18: July 2017-March, 2018 and 2018-19).

The time limit as specified in Section 16(4) is linked to Section 39 of the CGST Act, 2017 and “GSTR – 3B” cannot be considered as a return to be filed under Section 39 of the CGST Act, 2017. The return as specified under Section 39 is “GSTR – 3” and not “GSTR – 3B”, the time limit for such returns have been deferred till date and not been notified.

After the due dates as mentioned above, no credit could have been availed except in respect of IGST paid on import of goods by such registered persons. Therefore, any credit availed in these returns is recoverable.

The board directed to take necessary action to recover the ineligible input tax credit (ITC) is to be initiated immediately and an Action Taken Report and results achieved in this regard are to be furnished to board office by 05.02.2020.