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Input Tax Credit claim

Input Tax Credit Claim : After various representations and comments received from stakeholder regarding clarification on the procedure for rectification of errors made in reporting Input Tax Credit claim while filing their GSTR-3B return, the Commissioner of GST issues guidelines and notifications. We summarized these common errors of ITC claim and its solutions as below:

Situation.1: Input Tax Credit Claim was under reported while filing GSTR-3B return and confirmed submission by taxpayer.

Example: Zenith Sunglasses Store while filing their FORM GSTR-3B return for the month of July, inadvertently, misreported Input tax credit of Rs.5,00,000/- as Rs.50,000/-. They had confirmed and submitted their return. What can they do?

Solution: Zenith Sunglasses Store may use the ‘edit return’ facility to add more Input tax credit to their submitted FORM GSTR-3B. Once, this is done, such credit will be reflected in their Electronic Credit ledger and may be utilized to offset liabilities for this month or for subsequent months.

Situation.2: Input Tax Credit Claim was under reported, confirmed submission and cash was added to the electronic cash ledger.

Example: Rubby Cosmetics Store while filing their FORM GSTR-3B return for the month of July, inadvertently, misreported Input tax credit of Rs.5,00,000/- as Rs.50,000/-. They had confirmed and submitted their return. And cash of Rs.4,50,000/- was added to the electronic cash ledger What can they do?

Solution: In a case, taxpayer has nothing to do with Cash ledger.

Situation.3: Input Tax Credit Claim was under reported, cash was added to the electronic cash ledger as well all liabilities were offset by debiting the cash and credit ledger and finally return filed.

Example: Sony Bag Store while filing their FORM GSTR – 3B for the month of July, inadvertently, misreported Input tax credit of Rs.5,00,000/- as Rs.50,000/-. They had filed their return and paid Rs.4,50,000/- in cash. What can they do?

Solution: In such a situation, the return has already been filed, Sony Bag Store may add such Input tax credit in their return for subsequent month(s).

Situation.4: Input Tax Credit Claim was excess reported while filing GSTR-3B return and confirmed submission by taxpayer.

Example: Sony Bag Store While filing their FORM GSTR-3B for the months of July, 2017, inadvertently, reported their eligible input tax credit, as Rs.5,00,000/- instead of Rs.3,00,000/-. What can they do?

Solution: Sony Bag Store has submitted details of their input tax credit but not used such credit for offsetting their liabilities, they can reduce their input tax credit by using the “edit” facility.

Situation.5: Input Tax Credit Claim was excess reported, confirmed submission and cash was added to the electronic cash ledger as per the return liability.

Example: Ashirwad Sanitory Stores, inadvertently, while filing their FORM GSTR-3B for the months of July, 2017,reported their eligible input tax credit claim, as Rs.5,00,000/- instead of Rs.3,00,000/-. What can they do?

Solution: Ashirwad Sanitory Stores has submitted details of their input tax credit claim but not used such credit for offsetting their liabilities, they can reduce their input tax credit claim by using the “edit” facility. Since, they have deposited Rs.5,00,000/- only in their input tax credit ledger they may deposit additional Rs.2,00,000/- in the cash ledger by creating challan in FORM GST PMT-06.

Situation.6: Input Tax Credit Claim was excess reported, confirmed submission and cash was added to the electronic cash ledger as per the return liability, all liability were offset by debiting the cash and credit ledger and finally return filed.

Example: Metro Nike Shoes, inadvertently, While filing their FORM GSTR-3B for the months of July, 2017, reported their eligible input tax credit claim, as Rs.5,00,000/- instead of Rs.3,00,000/-. They also utilized their additional input tax credit and filed their returns. What can they do?

Solution: Since Metro Nike Shoes, had utilized ineligible credit to offset such liabilities, the company will have to pay (through cash)/Reverse such over reported utilized input tax credit with interest in the return of subsequent month.

Situation.7: Input Tax Credit Claim was wrongly (i.e. Instead of IGST reported CGST & SGST) reported while filing GSTR-3B return and confirmed submission by taxpayer.

Example: Zen Computers is registered in the Gujarat state. While entering their inward supplies from Dehli, in FORM GSTR-3B, the firm realized that they had inadvertently, shown inter-State supply as intra-State supply, Rs.1,00,000/- claimed ITC accordingly and submitted the return. What can they do?

Solution: Zen Computers will have to rectify wrongly reported Input tax credit claim by using the edit facility. Here, the Zen Computers will reduce their Central Tax / State Input tax credit claim by Rs.1,00,000/- and add integrated ITC claim and proceed to file their return.

Situation.8: Input Tax Credit Claim was wrongly reported, confirmed submission and cash was added to the electronic cash ledger as per the return liability (i.e. Cash added to IGST instead of CGST+SGST).

Example: Zen Computers is registered in the Gujarat state. While entering their inward supplies from Dehli, in FORM GSTR-3B, the firm realized that they had inadvertently, shown inter-State supply as intra-State supply, Rs.1,00,000/- claimed ITC accordingly and submitted the return. Further, they also had updated their IGST, Central Tax and State tax cash ledgers. What can they do?

Solution: Zen Computers will have to rectify wrongly reported Input tax credit claim using the edit facility. They will reduce Central Tax / State tax credit and increase IGST credit. Further, they will have to pay CGST+SGST and update their cash ledger. They may seek for IGST cash refund in due course or use the same for offsetting future liabilities.

Situation.9: Input Tax Credit Claim was wrongly reported, cash was added to the electronic cash ledger as per the return liability as well as all liabilities were offset by debiting the cash and credit ledger and finally return filed.

Example: Zen Computers while filing their FORM GSTR-3B for the months of July, 2017, inadvertently, reported their Central Tax credit of Rs.6, 00,000/- as Integrated tax credit. In order to avoid late fee and penalties, they paid Rs.6, 00,000/- Central Tax in cash and did not utilize their integrated tax credit. What can they do?

Solution: Since, Zen Computers has filed the returns and there is an unutilized Integrated tax credit of Rs.6,00,000/- which was inadmissible to them, they will have to pay/reverse such credit in the return of subsequent month(s). Further, Central Tax credit of Rs.6,00,000/- can be availed in return of subsequent month(s).

Note : There is nothing to do in GSTR-1.

 

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8 thoughts on “Wrong Input Tax Credit claim in GSTR-3B

  1. santosh ghawali says:

    Sir,
    In the month of July we have file form 3B with wrong credit that is some credit of central excise we have shown in all other ITC and when Trans 1 filed by us same credit we have shown in Trans 1 now how can we revered the credit please guide

  2. HIREN PATEL says:

    WHERE IS THE EDIT FACILITY? I CAN NOT FIND IT TILL DATE!!!

    1. Sumeet Chopra says:

      Even i also don’t fine edit facility

  3. rao vs says:

    sir
    we have taken wrong credit in CGST , now while we debiting this even same amount is reflected in SGST also.
    how to show this entry only reflecting in CGST. can you please suggest.

    1. Manoj Jain says:

      I am facing the same problem.

  4. R.Sinha says:

    Sir, wrongly I claimed input gst against purchase of vehicle . now could i rectify he same

  5. Ashraf says:

    Dear Sir,

    Please share the notification or link or notification reference number from department for guidelines for rectification of credit wrong credit claim.

  6. ASGHAR says:

    Dear Sir,
    IGST input credit double claimed in Jan 2018 and also in Feb.2018 as same amount but not utilized. How to rectify this error?

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