Retrospective amendment in the CGST Rules – last date to avail Input Tax Credit for FY 2017-18 and FY 2018-19

This is to apprise you regarding recent amendment in the Central Goods and Services Tax Rules, 2017 (‘CGST Rules’) vide Notification No. 49/2019-Central Tax dated October 9, 2019. Vide this, the Government has amended Rule 61(5) of the CGST Rules to make Form GSTR-3B a return under Section 39(1) of the Central Goods and Services Tax Act, 2017 (‘CGST Act’)  where due date of filing return under Form GSTR-1 or Form GSTR-2 is extended. The amendment has effectively replaced Form GSTR-3 with Form GSTR-3B with effect from July 1, 2017.  

In this update, we have discussed the impact of this retrospective amendment on last date to avail Input Tax Credit (ITC) for FY 2017-18 and FY 2018-19.

Notification No. 10/2017-Central Tax dated June 28, 2017 amended Rule 61 of the CGST Rules to provide that if filing of return under Form GSTR-1 or Form GSTR-2 is extended, then the return under Section 39 of the CGST Act shall be filed in Form GSTR-3B.

The last date of availing ITC under Section 16(4) of the CGST Act is earlier of:

1. Due date of filing of return under Section 39 for March of succeeding year (FY 2017-18) and for September of succeeding year (FY 2018-19 onwards); or
2. Date of filing of annual return.

With this amendment, the date of return under Section 39 shall be due date of filing Form GSTR-3B. Hence, the last date of availing ITC shall be earlier of:

• FY 2017-18 – April 20, 2019 or date of filing of annual return
• FY 2018-19 – October 20, 2019 or date of filing of annual return

NITYA Comments: The amendment has been made to overcome the decision of AAP & Company (discussed in trailing mail). With this amendment, taxpayers who took credit of FY 2017-18 post April 20, 2019 will need to reverse the same. Similarly, the taxpayers will not be allowed to avail ITC for FY 2018-19 post October 20, 2019.

We are sending a separate update on the impact of this retrospective amendment on liability to pay interest on delayed payment of taxes.