The GSTR-3B of September, 2018 is little different compared to the GSTR-3B which you had filed all these days. The difference here is not about the format rather it is about compliance activities, effort and time involved in filing GSTR-3B of September, 2018. Yes, you guessed it right! The difference is all about the last chance to claim unclaimed ITC on invoices pertaining to July’2017 to March’2018.

You might be aware that Input tax credit pertaining to invoices issued by the suppliers during 1 July 2017 to 31 March 2018 needs to be claimed on or before filing GSTR-3B of September, 2018. This implies that the last opportunity for you to claim ITC is to report it in GSTR-3B of September, 2018.

The good news is that the due date to file GSTR-3B is extended to 25th October, 2018 which was originally dated to 20th October, 2018.

Let us consider an example for ease of understanding.

If an invoice is issued by the supplier on 31 March 2018 and If ITC is not claimed on such Invoice in any of GSTR-3B filed till 25 October 2018, then credit pertaining to such invoice cannot be claimed and it will lapse.

Steps to claim unclaimed ITC

In order to safeguard your ITC from getting lapsed, the following are some of the key actions which you need to consider before filing GSTR-3B of September, 2018.

  • Download GSTR-2A from GST Portal
  • Reconcile GSTR-2A with your books of Accounts.
  • The reconciliation activity involves line-wise comparison of your purchase register with GSTR-2A.
  • Post reconciliation, identify the purchases pertaining to July’17 to March’2018 on which ITC is not claimed.
  • Ideally, purchases which are part of GSTR-2A but not reflected/accounted in your books are the ones which you need to look for and claim ITC.
  • You may also need to verify your previous GSTR-3B returns to identify the invoices accounted in books but not claimed.
  • After the identification of unclaimed purchase invoice, determine the ITC eligibility on such invoices. Meaning, the ITC should not be either blocked or restricted.
  • Claim eligible ITC on Invoice pertaining July’17 to March’18 by reporting it in GSTR-3B along with ITC of September month.

Reconciliation of books with returns is key for any business to be GST complaint. It is not a one-time activity which you need to do it to claim unclaimed ITC, rather it is a continuous activity which needs to be carried out every month. The Reconciliation of returns with books of accounts will help the businesses in identifying the following:

  • Suppliers who have not filed their GSTR-1
  • Instances where wrong details are being disclosed by your Suppliers
  • Cases where Wrong GSTIN is disclosed
  • Invoices on which ITC has not been availed
  • Mismatch due to Debit notes and credit notes issued

Over and above, it helps you to identify the GAP between 2Aà3BàBooks, follow-up and act on time.

While the benefits of reconciliation are many but you can leverage on these only with help of system assisted reconciliation. The efforts and time involved in manual reconciliation are huge. It involves line-by-line comparison of GSTR-2A with your books of accounts. Therefore, it is recommended that you need to have a software which automates the reconciliation activity by reading the GSTR-2A and the purchase invoices recorded in the books.

Using Tally.ERP 9, you can upload the GSTR-2A and automatically reconcile the purchases accounted in books and GSTR-2A. To know more, please read Reconciliation of GSTR-2A with Books of Accounts

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Yarab A

Author: Yarab A

Yarab is associated with Tally since 2012. In his 7+ years of experience, he has built his expertise in the field of Accounting, Inventory, Compliance and software product for the diverse industry segment. Being a member of ‘Centre of Excellence’ team, he has conducted several knowledge sharing sessions on GST and has written 200+ blogs and articles on GST, UAE VAT, Saudi VAT, Bahrain VAT, iTax in Kenya and Business efficiency.