Section 38 of GST – Furnishing details of inward supplies
(1) Every registered person, other than an Input Service Distributor or a non-resident taxable person or a person paying tax under the provisions of section 10, section 51 or section 52, shall verify, validate, modify or delete, if required, the details relating to outward supplies and credit or debit notes communicated under sub-section (1) of section 37 to prepare the details of his inward supplies and credit or debit notes and. may include therein, the details of inward supplies and credit or debit notes received by him in respect of such supplies that have not been declared by the supplier under sub-section (1) of section 37. (2) Every registered person, other than an Input Service Distributor or a non-resident taxable person or a person paying tax under the provisions of section 10 or section 51 or section 52, shall furnish, electronically, the details of inward supplies of taxable goods or services or both, including inward supplies of goods or services or both on which the tax is payable on reverse charge basis under this Act and inward supplies of goods or services or both taxable under the Integrated Goods and Services Tax Act or on which integrated goods and services tax is payable under section 3 of the Customs Tariff Act, 1975, and credit or debit notes received in respect of such supplies during a tax period after the tenth day but on or before the fifteenth day of the month succeeding the tax period in such FORM and manner as may be prescribed: Provided that the Commissioner may, for reasons to be recorded in writing, by notification, extend the time limit for furnishing such details for such class of taxable persons as may be specified therein: Provided further that any extension of time limit notified by the Commissioner of State tax or Commissioner of Union territory tax shall be deemed to be notified by the Commissioner (3) The details of supplies modified, deleted or included by the recipient and furnished under sub-section (2) shall be communicated to the supplier concerned in such manner and within such time as may be prescribed. (4) The details of supplies modified, deleted or included by the recipient in the return furnished under sub-section (2) or sub-section (4) of section 39 shall be communicated to the supplier concerned in such manner and within such time as may be prescribed. (5) Any registered person, who has furnished the details under sub-section (2) for any tax period and which have remained unmatched under section 42 or section 43, shall, upon discovery of any error or omission therein, rectify such error or omission in the tax period during which such error or omission is noticed in such manner as may be prescribed, and shall pay the tax and interest, if any, in case there is a short payment of tax on account of such error or omission, in the return to be furnished for such tax period: Provided that no rectification of error or omission in respect of the details furnished under sub-section (2) shall be allowed after furnishing of the return under section 39 for the month of September following the end of the financial year to which such details pertain, or furnishing of the relevant annual return, whichever is earlier. Related provisions of the Statute
Introduction
This provision relates to furnishing of details of inward supplies by the recipient on the basis of details of outward su4pplies uploaded by the supplier(s) in Form GSTR 1.
Analysis
(a) In respect of the return for outward supplies filed by the supplier of goods / services (under section 37 of CGST / SGST Act, 2017), recipient of supply is required to match his inward supply details with that of the details uploaded by the supplier by way of furnishing Form GSTR 1.(b) The details uploaded by the supplier will be made available to the recipient in Part ‘A’ of Form GSTR 2A (the details of input tax credit distributed by input service distributor will be made available in Part ‘B’ of said Form i.e., Form GSTR 2A). The details will be available for verification as and when the supplier has furnished Form GSTR 1. The details of tax deducted at source and tax collected at source will be made available in Part ‘B’ of Form GSTR 2A and the activities as specified supra for Part ‘A’ can be done i.e., accept / modify / reject / add, for values made available to the recipient of supply in Part ‘B’ of the said form. Part A of FORM GTSR 2A will contain the following details (auto-populated on basis of Form GSTR 1 submitted by supplier). Note: The filing of Form GSTR-2 has been suspended for the time being and same will be notified by way of notification. (c) In case, any error or omission is discovered in the course of matching as specified in the Act and discussed under Section 42 and 43, rectifications of the same shall be effected and tax and interest, if any as applicable shall be paid on such corrections by the person responsible for filing the return of inward supplies.(d) Such rectification of error or omission, however, is not permitted after filing of annual return or before the due date for filing the return for the month of September of the following financial year to which the details pertain, whichever is earlier. Issues and Concerns (i) The GST Council / GSTN is effecting a number of modifications in the modules to the returns and more changes to the same are expected to be made in the near future. In this regard, as a recipient of supply one would have to be cautious since uploading of the supply details is by his suppliers by way of filing of GSTR 1 (for the period beginning July 2017 till date new system of return is made available). The Recipient will only download and verify such details in Form GSTR 2A. The Recipient should ensure that, all his inward supplies on which he has availed input tax credit has been uploaded by his supplier and the details of the same is available in Form GSTR 2A. By this, recipient of supply can avoid interest liability on availment of excess credit (in the eyes of exchequer) which may also effect his Goods and Service Tax Compliance rating in long run. (ii) Further, recipient of credit shall be aware of the fact that, input tax credit in relation to supply received in a particular financial year say 2018-19 (including transactions of credit / debit notes as the case may be), if not availed earlier, is to be availed on or before the due date prescribed for filing of return for the month of September 2019 or date of filing of annual return in Form GSTR 9, whichever is earlier. On this aspect law would be sacrosanct and may not allow additional time which will result in losing out on input tax credit. Additional Comments It is important to note that GST Council in its 27th Council Meeting held on 04.05.2018 has approved the principles for the new return design proposed by a Group of Ministers on IT simplification. According to the press release issued by Central Board of Indirect Taxes and Customs, it is recommended that there will be one single return to be furnished by taxpayer every month (except for composition taxpayer). Further uploading of invoices for outward supplies will be allowed on real time basis and the same will visible to the recipient as and when the invoice(s) is / are uploaded by the supplier. The recommendations also state that for another six months, returns will have to be filed in Form GSTR 3B and GSTR 1. Input tax credit will be available to the recipient during this phase as well as for six months from the date of introduction of new return proposed on provisional basis i.e., on the basis of input tax credit availed by the recipient of supply in his return. However from the date of introduction of proposed return system, details of differences between credit availed by recipient of supply and amount of credit as per the invoices uploaded by the supplier will be made available to the recipient of the supply. After end of Phase 2 of introduction of new return system, availability of input tax credit on provisional basis will be withdrawn i.e., input tax credit will be available only when the invoice details is uploaded by the supplier i.e., purely on the matching concept basis. Also, the proposed return system has taken into consideration unnecessary movement of input tax credit by suppliers who are defaulters of payment of taxes. Default beyond threshold amount will result in blocking of input tax credit to the recipient of supply from such default suppliers. Recommended Articles –
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