The Central Board of Indirect Taxes and Customs (CBIC) has notified the amendments to the Central Goods and Services Tax (CGST) Rules, 2017; after the recommendation regarding reversal of Input Tax Credit (ITC) was taken in lieu of non-payment by the supplier. The rules also prescribe the procedure to re-avail the same.
The 48th Council Meeting held on 17.12.2022 had recommended to include a new provision in the Central GST Act where the taxpayer can reverse the input tax credit in the event of non-payment of tax by the supplier by a specified date. The council further proposed for a mechanism for re-availment of such credit, if the supplier pays tax subsequently.
The Council had recommended to insert Rule 37A in CGST Rules, 2017 to prescribe the mechanism for reversal of input tax credit by a registered person in the event of nonpayment of tax by the supplier by a specified date and mechanism for re-availment of such credit, if the supplier pays tax subsequently.
This would ease the process for complying with the condition for availment of input tax credit under section 16(2)(c) of CGST Act, 2017.
The following insertion (Section 37A) was made by the amendment :–
“37A. Reversal of input tax credit in the case of non-payment of tax by the supplier and re-availment thereof.-
Where input tax credit has been availed by a registered person in the return in FORM GSTR-3B for a tax period in respect of such invoice or debit note, the details of which have been furnished by the supplier in the statement of outward supplies in FORM GSTR-1 or using the invoice furnishing facility, but the return in FORM GSTR-3B for the tax period corresponding to the said statement of outward supplies has not been furnished by such supplier till the 30th day of September following the end of financial year in which the input tax credit in respect of such invoice or debit note has been availed, the said amount of input tax credit shall be reversed by the said registered person, while furnishing a return in FORM GSTR-3B on or before the 30th day of November following the end of such financial year;
Provided that where the said amount of input tax credit is not reversed by the registered person in a return in FORM GSTR-3B on or before the 30th day of November following the end of such financial year during which such input tax credit has been availed, such amount shall be payable by the said person along with interest thereon under section 50.
Provided further that where the said supplier subsequently furnishes the return in FORM GSTR-3B for the said tax period, the said registered person may re-avail the amount of such credit in the return in FORM GSTR-3B for a tax period thereafter.”
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