The Kerala GST department has issued a set of instructions regarding the mandatory furnishing of correct and proper information of ineligible / blocked Input Tax Credit (ITC) and reversal thereof in return in FORM GSTR-3B.
The process of filing returns under the GST has been substantially changed over a period of time. One of the significant changes is the method for declaration of input tax credit (ITC) in the return in Form GSTR 3B. After the 43rd GST Council Meeting, the procedure for declaring the input tax credit in the return in Form GSTR 3B has been amended, and the same was notified in the notification referred 1st above. The GST Policy Wing of the Central Board of Indirect Taxes and Customs (CBIC) had already issued a clarification in the matter.
The input tax credit on the inward taxable supplies of goods or services or both to a registered person is not eligible under certain circumstances provided under Section 17(1), 17(2), 17(4) and 17(5) of the Central GST and Kerala State GST Act, 2017 read with Rules 38, 42 and 43 of the Central GST and Kerala GST Rules, 2017.
The department said that “total ITC (eligible as well as ineligible) of the taxpayer will be auto-populated from statement in FORM GSTR 2B in different fields of Table 4A of FORM GSTR 3B (except for the ineligible input tax credit on account of limitation of time period as specified in section 16 (4) of the CGST and KSGST Act, 2017 or where the recipient of an intra-State supply is located in a dif erent State than that of place of supply).”
The taxpayer shall not deduct the amount of ineligible input tax credit directly by editing the total amount of input tax credit auto populated in Table 4A of FORM GSTR 3B. If the taxpayer has to declare any amount of ineligible input tax credit under any of the provision, they should strictly adhere to the ensuing instructions in this regards, the circular said.
As per the instructions, Input tax credit not available, on account of limitation of time period as specified in Section 16 (4) of the CGST and KSGST Act, 2017 or where the recipient of an intra-State supply is located in a different State / UT than that of place of supply, may be reported by the taxpayer in Table 4 D (2) of FORM GSTR 3B. Such details are available in Table 4 of FORM GSTR-2B.
“.If any taxpayer has availed ineligible or blocked credits and in cases where the time limit prescribed under Section 39(9) of the Act for rectification by filing FORM GSTR 3B is over, they may reverse such input tax credit on his own ascertainment by filing FORM GST DRC-03, electronically on the common portal, in accordance with prevailing Acts and Rules, to avoid further litigations and proceedings such as Show Cause Notices demanding tax, interest, imposition of penalty etc,” it said.
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