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19 August, 2017

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GSTR-3B + TRANS-1 + Pending C/F/H Forms = Complex Problem with Big Impact For VAT Assessees

GSTR-3B + TRANS-1 + Pending C/F/H Forms = Complex Problem For VAT Assesses

By CA Ankit Gulgulia (Jain)

CBEC Vide Notification No. 23/2017 – Central Tax dated 17th August, 2017 extended the Due date for Filing GSTR-3B which we already wrote on earlier but we never knew the credit will be allowed resulting in TRANS-1 deadline itself being cut short to 28th August. 

But If you read only about the date extension and not between the lines and how significantly it can impact you, you may miss out something important ! 
Due Dates for furnishing the return in FORM GSTR-3B electronically through the common portal for the month of July, 2017, for such class of registered persons as mentioned in the corresponding entry in column (2) of the said Table, by the date specified in the corresponding entry in column (3) of the said Table, namely:-
TABLE
Sl. No.
Class of registered persons
Last date for furnishing of return in FORM GSTR-3B
Conditions
(1)
(2)
(3)
(4)
1.
Registered persons entitled to avail input tax credit in terms of section 140 of the said Act read   with rule 117 of the said Rules but opting not to file FORM GST TRAN-1 on or before the 28th August, 2017
20th August, 2017
2.
Registered persons entitled to avail input tax credit in terms of section 140 of the said Act read   with rule 117 of the said Rules and opting to file FORM GST TRAN-1on or before the 28th August, 2017

28th August, 2017
(i) compute the “tax payable under the said Act” for the month of July, 2017 and deposit the same in cash as per the provisions of rule 87 of the said Rules on or before the 20th August, 2017;
(ii) file FORM GST TRAN-1 under sub-rule (1) of rule 117of   the said Rules before the filing of FORM GSTR-3B;
(iii) where the amount of tax payable under the said Act for the month of July, 2017, as detailed in the return furnished in FORM GSTR-3B, exceeds the amount of tax deposited in cash as per item (i), the registered person shall pay such excess amount in cash in accordance with the provisions of rule 87of the said Rules on or before 28th August, 2017 along with the applicable interest calculated from the 21st day of August, 2017 till the date of such deposit.
3.
Any other registered person
20th August, 2017

Analysing the above makes us land at few significant interpretations :-

a)    If you are registered person and have opening transitional credit but opting not to file FORM GST TRAN-1 on or before the 28th August, 2017 then your date is still 20th August, 2017 only.
b)    If you are registered person and have opening transitional credit but opting to file FORM GST TRAN-1 on or before the 28th August, 2017 then your date is still 20th August, 2017 only
Now, you must file TRANS-1 before filing GSTR 3B and Pay Tax as per Utilisation of Opening Transitional Credit and Current July Credit by 20th August, 2017 only.
Where, the Tax Payable in GSTR-3B filed later than 20th August, 2017 exceeds Tax Paid in Case then the Differential is to paid along with Interest.
c)    If you are registered person and not have any opening transitional credit even then the original due date i.e. 20th August, 2017 helds.

Position of Above Vis-à-vis Pending Declaration Forms i.e. C / H / F etc
Now, Say if have transitional credit in VAT and also have pending C Foms/ H / F Forms etc then the Same if pending as on date of filing of TRANS-1 then the amount of differential credit on Pending turnover cannot be carried forward as per Section 140 of SGST Acts and refund is to be claimed subsequently when the Forms are duly received (Terms and Conditions thereof as applicable r.w Rule 12 of CST (Turnover & Registration) Rules, 1957
In such a case, if one feels that significant amount of C/H/F Forms etc can be received between 28.8.2017 to 30.9.2017 one can even opt for not filing of TRANS-1 before 28th August, 2017 to avoid Lapse of Transitional Credit Going Forward under GST.
Also, you must ensure that before filing TRANS-1 all your VAT and Service Tax/ Central Excise returns must be filed for for the period of six months immediately preceding the appointed date as per Section 140. Remember, even if VAT Returns not filed, the Credit of Service Tax/ Central Excise transition also cannot be carried forward. 

(Read Our Earlier Post on this Matter - http://www.charteredonline.in/2017/06/gst-transition-alert-not-filed-vat-returns-lose-service-tax-credit-gst.html)


Section 140 of SGST – Bare Extract

140. (1) A registered person, other than a person opting to pay tax under section 10, shall be entitled to take, in his electronic credit ledger, credit of the amount of Value Added Tax, if any, carried forward in the return relating to the period ending with the day immediately preceding the appointed day, furnished by him under the existing law in such manner, as may be prescribed:

Provided that the registered person shall not be allowed to take credit in the following circumstances, namely: –
(i) where the said amount of credit is not admissible as input tax credit under this Act; or
(ii) where he has not furnished all the returns required under the existing law for the period of six months immediately preceding the appointed date; or
(iii) where the said amount of credit relates to goods sold under such exemption notification claiming refunds as are notified by the State Government.

Provided further that so much of the said credit as is attributable to any claim related to section 3, sub-section (3) of section 5, section 6, section 6A or sub-section (8) of section 8 of the Central Sales Tax Act, 1956 (Central Act 74 of 1956) which is not substantiated in the manner, and within the period, prescribed in rule 12 of the Central Sales Tax (Registration and Turnover) Rules, 1957 shall not be eligible to be credited to the electronic credit ledger:
Provided further that an amount equivalent to the credit specified in the second proviso shall be refunded under the existing law when the said claims are substantiated in the manner prescribed in rule 12 of the Central Sales Tax (Registration and Turnover) Rules, 1957.

2. Payment of taxes for discharge of tax liability as per GSTR-3B: Every registered person furnishing the return in FORM GSTR-3B shall, subject to the provisions of section 49 of the said Act, discharge his liability towards tax, interest, penalty, fees or any other amount payable under the Act by debiting the electronic cash ledger or electronic credit ledger.
Explanation.- For the purposes of this notification, the expression-
(i) “Registered person” means the person required to file return under sub-section (1) of section 39 of the said Act;
(ii) “tax payable under the said Act” means the difference between the tax payable for the month of July, 2017 as detailed in the return furnished in FORM GSTR-3B and the amount of input tax credit entitled to for the month of July, 2017 under Chapter V and section 140 of the said Act read with the rules made thereunder.
Disclaimer :- Personal Views for Educational Purpose Only. 

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