July 2019 Gujarat HC issues decision on last date for claiming ITC for invoices from July 2017 to March 2018
Facts
The taxpayer, via a writ petition1, challenged the press release dated 18 October 2018, which clarified that input tax credit (ITC) for invoices issued during July 2017 to March 2018 can be availed until the last date of filing Form GSTR-3B for September 2018, i.e., until 20 October 2018. The taxpayer contended that the clarification is contrary to section 16(4) of the Central Goods and Services Tax Act, 2017 (CGST Act, 2017), as the return
prescribed under section 39 of the CGST Act, 2017 is a return required to be furnished in Form GSTR-3 and not Form GSTR-3B. Further, the taxpayer submitted that Form GSTR-3B has been notified in terms of Rule 61(5) and not section 39 of CGST Act, 2017.
High Court's decision
The Gujarat High Court (HC) answered in favour of the taxpayer and observed as follows:
It was the Government’s decision, factoring the technical glitches and difficulties faced by taxpayers in filing Forms GSTR-2 and GSTR-3, both which are in abeyance. Thereafter, the eighteenth GST Council meeting decided to allow filing of a shorter return in Form GSTR-3B for an initial rollout period.
Form GSTR-3B was not introduced as a return in lieu of return required to be filed in Form GSTR-3. The return in Form GSTR-3B was only a temporary stopgap arrangement until the due date of filing return in Form GSTR-3 was notified.
Subsequently, through notification no. 10/ 2017 - Central Tax dated 28 June 2017, the Government introduced mandatory filing of return Form GSTR-3B, stating that it is a return in lieu of Form GSTR-3.
Thereafter, the Government omitted such reference retrospectively, vide notification no. 17/2017 –Central Tax dated 27 July 2017.
Therefore, para 3 of the press release dated 18 October 2018, clarifying that the last date for availing ITC
relating to invoices issued during July 2017 to March 2018, as the last date for filing return in Form GSTR-3B, is illegal and contrary to section 16(4) read with section 39(1) and Rule 61 of the CGST Rules.
PwC comments
This is a welcome decision by the Gujarat HC, which addresses the dilemma prevailing over the industry qua the last date for availment of ITC for invoices issued during the first nine months of the GST regime. It may be noted that the industry continues to face “mismatch” or “unmatched” invoices for this period. If not further litigated, the taxpayer can now avail ITC for the period 2017-2018 until 31 August 2019, as the current due date for furnishing annual return.
1 R/Special Civil Application No. 18962 of 2018
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