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Can difference in ITC claimed in GSTR-3B to GSTR-2B restrict you from filing GST returns?
Category: Notification and amendments, Posted on: 15/11/2023 , Posted By: Adv Akshay Sadashiv Havaldar
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Can difference in ITC claimed in GSTR-3B to GSTR-2B restrict you from filing GST returns?
The GSTN has issued Advisory No. 606 dated October 06, 2023 in respect of the introduction of Compliance Pertaining to DRC-01C (Difference in Input Tax Credit (ITC) available in GSTR-2B and ITC claimed in the GSTR-3B).

Can differences in ITC claimed in GSTR-3B to GSTR-2B restrict you from filing GST returns?
Answer Yes

The Government vide Notification No. 38/2023 Central Tax dated August 04, 2023 inserted the Rule 88D in CGST Rule, 2017 dealing with difference in input tax credit available in GSTR-2B and ITC claimed in GSTR-3B. This functionality vis a vis this rule has now started operating on the GST portal.

The system now compares the ITC available as per GSTR-2B/2BQ with the ITC claimed as per GSTR-3B/3BQ for each return period. If the claimed ITC exceeds the ITC available as per GSTR-2B by predefined limits, as directed by competent authority, the taxpayer shall receive an intimation in the form of Form DRC-01C.

Upon receiving the intimation, the taxpayer must file a response using Form DRC-01C Part B. The taxpayer has the option to either provide details of the payment made to settle the difference using Form DRC-03 or provide an explanation for the difference out of the options provided in the form or even choose a combination of both options and file it.

I have not filed the Form DRC-01C for the previous Tax period. Can I still file GSTR-1/IFF for the current Tax period?

If you have not filed Form DRC-01C Part B for any period for which you received an intimation in Form DRC-01C Part A, you will not be able to file GSTR-1/IFF for the subsequent period.
It is important to ensure timely filing of Form DRC-01C Part B to avoid any interruptions in the filing of GSTR-1/IFF.

After filing the reply for DRC-01C Part B, how much time will it take to unblock the form GSTR-1/IFF? When will I be able to file GSTR-1/IFF?

After filing the reply for DRC-01C Part B, you can instantly file GSTR-1/IFF. If you are facing any issue while filing GSTR-1/IFF, then you need to log out and log in again after a few minutes.

In case of intimation, either you have to pay DRC-03 and mention ARN in reply or provide reasons in DRC-01 Part B as below: The reasons in respect of that part of the excess input tax credit that has remained to be paid are as under:

S.No Brief Reasons for Difference Details (Mandatory)
1 Input tax credit not availed in earlier tax period(s) due to non-receipt of inward supplies of goods or services in the said tax period (including in case of receipt of goods in installments).

2 Input tax credit not availed in earlier tax period(s) inadvertently or due to mistake or omission

3 ITC availed in respect of import of goods, which is not reflected in FORM GSTR-2B

4 ITC availed in respect of inward supplies from SEZ, which are not reflected in FORM GSTR-2B

5 Excess reversal of ITC in previous tax periods which is being reclaimed in the current tax period

6 Re-credit of ITC on payment made to supplier, in respect of ITC reversed as per rule 37 in earlier tax period.

7 Re-credit of ITC on filing of return by the supplier, in respect of ITC reversed as per rule 37A in earlier tax period.

8 FORM GSTR-3B filed with incorrect details and will be amended in the next tax period (including typographical errors, wrong tax rates, etc.)

9 Any other reasons (Please specify)


Advisory in respect of introduction of Compliance Pertaining to DRC-01C (Difference in Input Tax Credit (ITC) available in GSTR-2B & ITC claimed in the GSTR-R3B):

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