The importance of GSTR 3b of September 2021​

The importance of GSTR 3b of September 2021​

The last date for filing GSTR 3B of September 2021 is 20th October 2021. Do you know it is also the last date for availment of Input Tax Credit for invoices or debit notes pertaining to the Financial Year 2020-2021 as per Section 16(4) of Central Goods and Services Tax Act, 2017 (‘CGST Act’)? Any credit that has not been claimed for the financial year 2020-2021 by the above date, would lapse.

Understand the Reconciliation process of the input tax credit in the flow chart below. The same process can be utilized while preparing annual returns too.

The importance of GSTR 3b of September 2021​

The Reconciliation will enable the assessee to remove discrepancies in tax liability, and input tax credit availed. It also reduces chances of assessment, scrutiny or audit.

Know some of the reasons for mismatches:

  • Your software reconciliation as well as GSTR 2A/2B, reflect the suppliers who have not filed their return or have not submitted your invoice in their return. (Tip: Ensure to send a reminder for timely availment of the ITC).
  • You may find out amount mismatches between the tax liability disclosed by the supplier in their returns and the credit availed by the assessee. (Tip: Reconcile as per the flow above to identify the reasons for such discrepancies and resolve the same for timely availment of eligible credit).
  • Difference in invoice details disclosed by the vendor and those disclosed by the assessee like Vendor/Recipient GST number, invoice no., invoice date, invoice amount, etc.

The input tax credit for FY 2020-21 can be availed in the September 2021 return other than ineligible credits as per Section 17(5) of the CGST Act, 2017.

GST law Consultancy

(Contribution by Advocate Shubham Goel)

Reconciliation helps to remove discrepancies in tax liability and input tax credit availed. It also reduces the chances of assessment, scrutiny, or audit.

Mismatches can occur when suppliers haven’t filed their returns or haven’t included your invoice in their return. The reasons for mismatch may alos be due to delay or erroneous filing of returns by the supplier.

Discrepancies can occur in details such as Vendor/Recipient GST number, invoice number, invoice date, invoice amount, and more.

GSTR 3B is a monthly summary return for businesses to report their summary of outward and inward supplies and pay the tax liability.

Failure to reconcile and resolve discrepancies may cause loss of ITC resulting in excess payment of taxes. It also increases the chance of assessment, scrutiny, or audit by the tax authorities.

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