The Kerala Goods and Service Tax Department has issued the Guidelines regarding the procedure to be followed in scrutiny of returns and thenceforth actions.
As per Section 16(4) of the KSGST Act, 2017, a registered person shall not be entitled to take ITC in relation to any invoice or debit notes (ie; B2B (Regular) including supply of service received from SEZ) by filing Form GSTR 3B after the due date of furnishing the said return for the month of September of the succeeding financial year or Annual Return for the relevant F.Y whichever is earlier.
If any taxpayer availed ITC on B2B (Regular) invoices or debit notes including supply of service received from SEZ beyond the aforesaid due dates, then the same shall be disallowed and notice can be issued. The date of availment of ITC shall be the date of filing of that particular Form GSTR 3B. This can be verified through the back-office system under Registration>GSTIN Dashboard>Return details.
The ITC on Capital goods can be credited to the Electronic Credit Ledger in full in the month of inward supply made and the proportionate ITC, of the said capital goods, not related to the taxable supply/nonbusiness purpose has to be reversed under Rule 43 of KSGST Rules, 2017. Such taxable persons are required to reverse the proportionate ITC of 1/60 of the tax involved on the said capital goods in the ratio of taxable/exempt and business /non-business supply for the succeeding 60 months. This parameter was flagged in the back office only for 2017-18 on the basis of Form GSTR 9 filed by the taxpayers.
Notice can be issued in such cases where discrepancy notice in Form GSTASMT-10 or intimation in Part A of Form GST DRC-01A was issued and pending for further proceedings. For verification and accurate calculation under this parameter, the proper officer can call for the related documents from the taxpayer by issuing a letter. The proper officer can issue summons u/s. 70 of the KSGST Act, 2017 to call for such related documents, if the dealer failed to respond.
E-way bill was introduced w.e.f 01.04.2018. Hence this parameter has been flagged for scrutiny of returns w.e.f 2018-19 onwards.
The output tax payable as per Form GSTR 3B shall be compared with the Eway bill data available in the back-office system. For this verification use the back-office option E-waybills> Outward> Active> Item Level report, then filter the report into document type as Invoice and exclude 0% items. If the output tax due as per the said E-way bill report is higher than the output tax due declared in Form GSTR 3B, then notice shall be issued in such cases.
The proper officer can call for the related documents such as invoice, work completion certificate, etc. from the taxpayer by issuing a letter to verify the time of supply and remittance of tax through Form GSTR 3B. The proper officer can issue summons u/s. 70 of the KSGST Act, 2017 to call for such related documents, if the dealer failed to respond.
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