Section 43A – Filing Returns and Availing ITC
Section 43A is a recent addition to the CGST Act, 2019 which deals with the procedure for filing returns and availing Input Tax Credit. It has made the previously followed procedures more simplified and easy. Hence, getting acquainted with Section 43A is important for taxpayers who have to furnish returns and avail credit.
This article covers the following topics:
The Central Goods and Services Tax (CGST) Act, 2019 recently introduced Section 43A. This section introduces new and simplified procedures for filing returns and availing Input Tax Credit (ITC) under GST. The motive of Section 43A is to make operational the changes made in the GST framework of reporting returns.
Section 43A includes a ‘notwithstanding’ clause which means that its provisions will override Section 16(2) (conditions to avail ITC), Section 37 (details of outward supplies), and Section 38 (details of inward supplies) of the CGST Act. The intention of Section 43A is to benefit the taxpayers by allowing them to avail ITC on a provisional basis under certain conditions, even if other conditions are left unfulfilled.
The various amendments offered by Section 43A are:
- Registered taxpayers will be able to add, amend, or delete the inward supplies details in their monthly returns
- Even if the supplier has not uploaded invoices, there will be a mechanism for the recipient to avail ITC. In such a case, the available credit will be less than or equal to 20% of the ITC which is available to the recipient based on the details uploaded by the supplier. The rules for the same have not yet been notified.
- Both the recipient and the supplier can be severally and jointly liable to pay (a) output tax, and (b) availed ITC, if returns have not been filed and the outwards supplies details have been uploaded on the portal so as to avail credit.
- Procedures for recovery of such ITC or output tax have not yet been specified. Anyhow, the recovery proceedings can be waived off if the involved amount is less than or equal to Rs. 1,000.
- Rules have not yet been issued to prescribe details regarding the furnishing of outward supplies under special circumstances.
Currently, GST returns are being filed both online and offline. The forms used by taxpayers to file monthly GST returns are Form GSTR 3B and Form GSTR 1. There are various other GST return-filing forms under the head “GSTR” which are being used to file various other GST returns. Form GSTR 2 and Form GSTR 3 have currently been suspended by the Government of India.
The proposed new scheme under Section 43A has simplified the return filing mechanism for taxpayers. Certain simplifications made by the new return filing scheme are:
- Registered taxpayers will now only have to file one monthly return.
- Invoices can be uploaded on a real-time basis.
- Invoices can be uploaded by the suppliers at any time during the month before a cut-off. These invoices will be visible to buyers.
- The buyers/recipients will be able to claim ITC based on self-declaration. This is even possible when the supplier has not uploaded all the invoices in the interim period of the transaction.
Section 43A of the CGST Act, 2019 has been launched as a much required relief to taxpayers which will greatly reduce various concerns of the industry. Thus, the new GST return scheme under Section 43A will greatly help in simplifying and easing-out the procedure for filing returns and the procedure for availing ITC under GST.