Section 16 of the CGST Act 2017 outlines the eligibility and conditions for taking Input Tax Credit (ITC). Every registered taxpayer is allowed to claim ITC on supplies used for business purposes. However, Section 17(5) of the CGST Act lists scenarios where ITC is restricted.
Understanding the reversal of ITC under GST is critical, especially when credit is availed but later becomes ineligible due to specific circumstances, as outlined in Section 17(5). This article will cover the conditions for ITC reversal, re-availment scenarios, and limitations.
Re-availment of reversed ITC is permissible under certain conditions. Although the CGST Act does not provide explicit rules for re-availment in case of ITC reversal as per Section 17(5), similar provisions exist under Section 16(2). Taxpayers can reclaim credit if the cause of reversal is resolved.
Legal Provisions and Circulars Guiding Re-Availment
Though the CGST Act is silent on specific provisions regarding the re-availment of reversed ITC under Section 17(5), general GST rules on ITC management apply. Taxpayers can refer to Rule 37 of the CGST Rules, 2017, which governs the reversal and re-availment of ITC under certain conditions.
Documentation Required for Re-Availing ITC
Maintaining detailed records of all transactions leading to the reversal and re-availment of ITC is essential. Important documentation includes:
Inventory records showing re-tracing of goods (if applicable)
Proof of payment for goods and services
Supporting documents proving eligibility for re-availment
The GST law stipulates a time limit for claiming ITC, as per Section 16(4), but this limit does not apply when re-availing credit that was previously reversed due to Section 17(5) conditions. Rule 37(4) of the CGST Rules confirms no specific time limit for re-availment in such cases. However, it is advisable to re-avail the credit immediately upon the event, which will nullify the reversal.
Several practical situations could lead to the re-availing of ITC that was reversed earlier:
Capital Goods Used Partially for Exempt and Taxable Supplies
If capital goods are initially used for exempt and taxable supplies but later solely for taxable purposes, the ITC reversed earlier can be re-availed.
Goods Lost, Stolen, or Disposed of After ITC Was Availed
If lost or stolen goods are subsequently traced and added back to inventory, the credit reversed under Section 17(5) can be re-availed.
Reversal and Re-Availment in Case of Ongoing Litigation
If ITC is reversed during litigation, it can be reclaimed once the litigation concludes favorably.
How to Report Re-Availment in GSTR-3B
When re-availing reversed ITC, taxpayers should report the re-availment in Table 4(A)(5) of GSTR-3B. This ensures the credit is correctly accounted for in the month the re-availment occurs.
Tips for Avoiding Common Mistakes During Re-Availment
Maintain Proper Documentation: Ensure all records supporting re-availment are updated.
File on Time: Even though there’s no strict time limit, re-avail ITC as soon as the cause of reversal is resolved.
Consult Experts: Engage a tax consultant to ensure compliance and avoid penalties.
Re-availing ITC affects GST returns and annual reconciliation. Failure to comply with the reversal and re-availment rules could result in penalties or interest charges.
Consequences of Incorrect or Unauthorized Re-Availment
Unauthorized re-availment can lead to scrutiny from the tax department, potential audits, and additional interest under Section 50 of the CGST Act.
Importance of Audit and Record-Keeping for Re-Availed ITC
Proper audit trails and document management are essential to avoid disputes with tax authorities regarding re-availed ITC.
Implications of Section 17(5) of the CGST Act
The blocked credit provisions under Section 17(5) prevent the misuse of ITC claims. Businesses must ensure that only eligible credit is availed or re-availed.
Understanding the rules around ITC reversal and re-availment under GST is vital for businesses to manage their tax liabilities efficiently. By following the correct procedure for re-availment of ITC reversed under Section 17(5) and keeping accurate records, taxpayers can ensure compliance and minimize disputes.
For expert tax advisory and planning services in Bangalore contact Anil D'Souza & Associates to manage your GST compliance effectively.
Calculating ITC reversal depends on the specific reasons and the type of inputs, input services, or capital goods involved. If inputs are used for taxable and exempt supplies, Rule 42 and Rule 43 of the CGST Rules provide a formula to reverse ITC for exempt supplies proportionately. The formula is:
ITC to be Reversed = (Exempt Turnover / Total Turnover) × Common ITC.
If the reversal is due to ineligible credits under Section 17(5) (blocked credits), the entire ITC availed on such goods or services must be reversed.
Under Section 17(5) of the CGST Act, certain ITC claims are blocked. Specifically:
Section 17(5)(c) restricts the claim of ITC on goods or services used for the construction of immovable property (excluding plant and machinery) on your account, even if its for business purposes.
Section 17(5)(d) disallows ITC on goods or services received for construction (other than plant and machinery) used for immovable property, whether its for personal or business use.
This provision aims to prevent the use of ITC on items meant for personal or capital expenditures that dont directly contribute to taxable supplies.
Yes, under certain conditions, ITC refunds can be claimed. Key circumstances include:
Zero-rated supplies: Exports or supplies made to SEZ units, where unutilized ITC can be claimed as a refund.
Inverted duty structure: When the input tax rate is higher than the tax rate on output supplies. Unutilized ITC may be refunded in such cases, though certain items are excluded. Refund applications must be filed through Form GST RFD-01 on the GST portal. However, ITC refunds are not allowed for ineligible credits under Section 17(5).
For supplies under Reverse Charge Mechanism (RCM), ITC must be availed within the time limits prescribed:
You must claim ITC by the 20th of the month after the tax invoice is issued and the tax is paid under RCM.
The general rule is that ITC must be claimed by September 30 of the following financial year or before filing the annual return (whichever is earlier). Missing this deadline disqualifies you from claiming the ITC.
The latest updates to ITC rules emphasize stricter compliance:
Rule 36(4): ITC can be claimed only if the supplier uploads the corresponding invoices or debit notes in their GSTR-1 and it appears in the recipient’s GSTR-2B.
A 100% cap now applies, meaning taxpayers can claim ITC only if it matches the data reflected in their GSTR-2B.
ITC on CSR activities has been blocked under Section 17(5).
Taxpayers are required to ensure that their suppliers have filed GSTR-3B and paid the tax before claiming ITC.
What Are Micro, Small & Medium Enterprises (MSME)?
You Might Wonder If MSME Registration Is Mandatory Or Not!
How To Register As An MSME?
Benefits Of MSME Registration
The Registration Process Of MSME
Documents Required For MSME Registration
List Of Details You Need To Provide For MSME Registration On Its Application Form
How Can You Download The MSME Registration Certificate?
MSME Schemes Launched By The Government
How Do We Assist You With MSME Registration/SSI Registration?
FAQs
In a developing country like India, MSME industries are the backbone of the economy. It is rightly termed as “the engine of growth” for India. The MSME sector contributes to 45% of India’s total industrial employment, 50% of India’s total exports, and 95% of all industrial units of the country, and more than 6000 types of products are manufactured in these industries (As per the Ministry of Micro, Small & Medium Enterprises). When these industries grow, the economy of the country grows as a whole and flourishes. These industries are also known as small-scale industries (SSIs).
Although the government has not yet made MSME registration mandatory, registering will help you reap several benefits, including credit at a low interest rate, incentives on products for exports, excise exemption, statutory aid such as reservations, and interest on payments delayed due to unavoidable circumstances. A government scheme called Udyog Aadhar registration has been helping MSMEs since 2015.
You can apply online for MSME registration & verification. Click Here to register as an MSME and fill out the application form.
You can get an MSME certificate with lifetime validity in 2-5 working days. This certificate is for enterprises in both the manufacturing and service sectors. The name you use to register for new or existing businesses is unlimited.
Cheaper Bank Loans: Your bank loans get cheaper as the interest rate is very low at around 1 to 1.5%.
Tax Rebates: Various tax rebates are offered to MSMEs.
Credit for MAT: You are allowed a credit for minimum alternate tax (MAT) to be carried forward for up to 15 years instead of 10 years.
Government Tenders: Many government tenders are only open to MSME Industries.
Easy Credit Access: You can get easy access to credit.
Reduced Costs: Once you are registered, the cost of getting a patent or setting up the industry reduces as many rebates and concessions are available.
Government Licenses: You will be given higher preference for government licenses and certification.
One Time Settlement Fee: There is a One Time Settlement Fee for non-paid amounts of MSME.
To register for the small and medium-scale industry, you have to fill out a single form, which you can do online or offline. Click here to get the application.
If you want to register in more than one industry, you can do individual registration.
The documents required for registration are your personal Aadhar number, Industry name, Address, bank account details, and some additional information.
You can provide self-certified certificates.
No registration fees are required for this process.
After the documents are prepared and submitted to the MSME registrar, the experts will verify the submitted documents. This procedure requires 2 working days.
Once your MSME application is approved, your company gets registered and related documents will be sent to you.
You have to submit documents like business address proof, copies of purchase and sale bill, and licenses from regulatory bodies.
Business Address Proof:
If self-owned: Allotment letter, possession letter, lease deed, or property tax receipt.
If rented: Rent receipt and a no-objection certificate from the landlord. Any utility bill or document evidencing the landlord’s ownership is to be submitted.
Copies of Sale Bill and Purchase Bill:
Sale bill related to each end product that it will supply.
Purchase bill for each raw material that it will purchase.
Partnership Deed/MoA and AoA:
If the business is a partnership firm, submit the partnership deed.
In the case of a company, submit the Memorandum of Association and Articles of Association, and certificate of incorporation.
Copy of Licenses and Bills of Machinery Purchased:
In rare cases, submit a copy of an industrial license.
All bills and receipts related to purchasing and installation of plant and machinery.
Aadhaar number
Name of Entrepreneur as per Aadhaar card
Social category (General, OBC, SC/ST)
Gender
Physically Handicapped
Name of Enterprise
Type of Organization Proprietorship,. Partnership Firm, Private Limited Company, Public Limited Company, Limited Liability Partnership, Cooperative Society, Hindu Undivided Family, Self-Help Group, Society, or Trust)
PAN Card
Location/Address of Plant
Country, State, District, City, Tehsil, PIN Code
Office Address
Mobile Number, Email ID
Date of Commencement of Business
Bank account number and IFSC code
Business Activity of Enterprise
NIC 2 Digit Code – choose a primary activity
Additional detail of the enterprise
Number of Employees
Investment Amount in Plant and Machinery
Click Here to download the registration form.
Udyog Aadhaar memorandum: The government gives all individuals a 12-digit Aadhaar card. Registering in this scheme makes it easy to obtain credit, loans, and subsidies from the government. Registration can be done both online and offline.
Zero Defect Zero Effect: Goods manufactured for export must adhere to a certain standard. Under this scheme, exported goods are eligible for some rebates and concessions.
Quality Management Standards & Technology Tools: Helps MSMEs understand and implement quality standards and new technology.
Grievance Monitoring System: This system is beneficial in getting business owners' complaints addressed. Owners can check the status of their complaints.
Incubation: This helps innovators implement their new designs, ideas, or products. The government finances 75% to 80% of the project cost
Credit Linked Capital Subsidy Scheme: Provides new technology to replace old and obsolete technology. Businesses can directly approach banks for subsidies.
Women Entrepreneurship: Provides capital, counseling, training, and delivery techniques to women who want to start their own businesses.
We, as your MSME Registration Consultants in Bangalore, will help your business obtain MSME Registration to avail of the benefits. You can register your MSME or SSI through us in your city.
Step 1: Fill our simple form with your basic information. This is required for filing your application with the department.
Step 2: We will draft your documentation according to the details provided. It takes 1-2 working days.
Step 3: We will file your application and the required documents to the MSME registrar. Before submission, our expert will verify all your documents properly.
Step 4: Once the application is approved and your MSME certificate is issued, we will email and courier it to you.
What is the MSME registration number?
The MSME registration number, also known as the Udyog Aadhaar Number, is a 12-digit unique identification number provided to India's Micro, Small, and Medium Enterprises (MSMEs). This number is essential for businesses to avail themselves of various benefits and schemes offered by the government for the MSME sector.
What is an MSME certificate?
An MSME certificate is an official document issued to businesses that register under the MSME Act. This certificate confirms that the business is recognized as a micro, small, or medium enterprise and is eligible for various government benefits, subsidies, and schemes aimed at supporting MSMEs.
How do you check MSME registration by name?
To check MSME registration by name:
Visit the official Udyog Aadhaar website.
Enter your Udyog Aadhaar Number.
Provide the mobile number linked with the Aadhaar card.
Enter the verification code and click on the "Validate Udyog Aadhaar" button.
Alternatively, you can visit the MSME Databank and use the business name to check the registration details, but you will still need to provide the Udyog Aadhaar Number or a registration number.
How to find MSME registration number through PAN number?
To find your MSME registration number using your PAN number:
Visit the official Udyog Aadhaar website.
Navigate to the "Print Udyog Aadhaar" option
Enter your PAN number and the registered mobile number.
You will receive an OTP on your registered mobile number. Enter the OTP to verify.
Once verified, your Udyog Aadhaar details, including the MSME registration number, will be displayed.
How to find an MSME registration number?
To find out your MSME registration number:
Visit the official Udyog Aadhaar website.
Go to the "Print Udyog Aadhaar" section.
Enter your Aadhaar number and the registered mobile number.
Enter the OTP sent to your mobile number to verify your identity.
After verification, you will be able to see your Udyog Aadhaar details, including your MSME registration number.
Govt vide notification no 38/2020 dated 05.05.2020 had notified the fifth amendment to CGST Rules containing two amended.
1. Inserting the second proviso to Rule 26(1) providing for the filing of GSTR 3B by companies with EVC without use of Dsc during the period 21.04.2020 to 30.06.2020.
2. Inserting Rule 67A providing for NIL GSTR 3B by SMS. It was notified that this will be effective form a date notified later.
Govt vide notification 44/2020 dated 08.06.2020 has notified 08.06.2020 as the date for coming into effect of rule 67A. Following is the procedure for filing NIL GSTR3B through SMS.
Who have not made any sales (outward supply) for the period
Who doesn't have any Reverse Charge (RCM) Liability.
Who not intend to take any input tax credit for the period
Who don't have any late fee or other liability of the earlier period to be paid in this period.
Following is the procedure to be followed for filing NIL GSTR 3B through SMS.
SMS in the following format needs to be sent to No 14409 from the Registered Mobile Number.
space space space
For example, if you wish to file NIL GSTR 3 for the month of May 2020 for GTIN 29AJBPLD2419C1ZT, the format of the message shall be as follows
NIL 3B 29AJBPD2419C1ZT 052020
If the SMS is validated, you will receive the 'Validation Code' on the same mobile number. The validation code needs to sent to the same number 14409 to complete the filing. Validating message should be in the following format
space space .
For example, if the validation code received is 56789, validation SMS should be in the following format - CNF 3B 56789
Validation code received is usable only once, and shall be valid for 30 minutes.
In case SMS fails validation, instead of validation code Error Message will be received, which needs to look into and addressed.
1. A Simple Guide To Resolve Your GST Registration Rejected Application
2. Scope Of Principal-Agent Relationship Under GST
3. Implication Of GST On Transfer Of Business - At Glance
In case you need any further assistance regarding GSTR 3b return filing, please feel free to get in touch with our team of GST Consultants in Bangalore.
CPC (TDS) has provided new enhanced features, to further add to the convenience of online facility of filing corrections to the TDS Statements. With this feature, you will be able to submit Online Corrections at TRACES without even having a Digital Signature.
To avail the facility, it is requested to log in to TRACES and navigate to the Defaults tab to locate “Request for Correction from the drop-down list. Click to Proceed in absence of Digital Signature.
Digital Signature is not mandatory to be registered on TRACES for raising online corrections.
Only Challan Correction is permissible in the absence of Digital Signature. Digital Signature enables you to carry out PAN Corrections as well.
Correct KYC information needs to be submitted for the purpose of validation.
Online requests can be submitted, only if there is a regular statement already filed and processed.
All previous corrections pertaining to the statement should have been processed and the processing status can be verified from the Dashboard.
Challan/BIN Correction
A list of all Matched and Unmatched challans can be viewed by clicking the appropriate tab.
Matched challans can be corrected for the Amount Claimed as Interest and Others. Please note that Matched challans cannot be tagged.
Unmatched challans can be corrected and tagged to Deductee rows in the statement.
In addition, NO CHALLAN, which has been used for other purposes outside the system, should be tagged.
The corrections to the above challans can be reset by clicking the Reset tab if this requires to be further corrected.
PAN Correction
Invalid to Valid PAN: The correct name of the Valid PAN will be displayed in Name as per changed PAN.
Valid to Valid PAN: If the new PAN entered is Invalid, a message is displayed in the Action Status. Please note that there is only one opportunity for a Valid to Valid PAN correction.
All the corrected rows can be viewed by clicking on Show Edited Rows on the screen.
Action Summary:
After carrying out all the corrections, Action Summary can be referred for all changes carried out.
Please click Confirm for all intended changes and the statement is ready for submission.
Actions to Complete Submission:
Please navigate to the Defaults tab to locate Corrections Ready for Submission.
Click on Submit for Processing, which will prompt to digitally sign the submission.
Once the correction is submitted successfully, a Token Number for the same will be available.
Govt has proposed a staggered filing of GSTR 3B, to reduce the load on GST Portal on due date. Govt vide press release dated 22.01.2020 has proposed the following due dates for various tax filers based on the State of the Tax filers and their turnover. Notification to give effect to this change is expected soon.
Want to file GST return? We are here to help. Contact ADCA - One of the reputed GST Consultants In Bangalore - for the complete assistance.
MCA vide notification dated Jan 3, 2020 has made following amendment to Companies(Appointment and Remuneration of Managerial Personnel) Rules,2014 as to requirement of appointment of whole-time company Secretary and Secretarial Audit effective from April 1st2020. As per the amended provisions, ln case of private companies paid-up capital limit has been increased from five crores to 10 crores, for mandatory appointment of company Secretary. Secondly, the secretarial audit has been made applicable to every company having a loan or borrowing from the bank or financial institutions of Rs 100 crores or more.
Appointment of whole-time company secretary:
|
Current provision |
Provision with effect from April 1st 2020 |
or
|
or
|
Requirement of Secretarial Audit Report:
|
Current provision |
Provision with effect from April 1st 2020 |
Or
|
Or
Or
|
Explanation:
For the purpose of this sub-rule, it is clarified that the paid up-share capital, turnover, or outstanding loans or borrowings as the case may be, existing on the last date of the latest audited financial statement shall be taken into account.
Table of Contents
1. What is form 15G?
2. Who can submit form 15G?
3. Conditions to fulfill before submitting Form 15G
4. Instructions to fill out Form 15G
5. What if I forget to submit Form 15G?
6. Penalty for Submitting False Declaration using Form 15G
Form 15G or 15H has to be submitted by fixed deposit holders at the start of a financial year to the relevant financial entity like a bank. This is done to avoid on the interest income earned.
Banks usually deduct TDS from the interest income on FDs if it crosses the threshold limit.
Form 15G is submitted by a resident individual whose age is below 60 years of age during the year as mentioned in the form.
Form 15H is submitted by a resident individual whose age is 60 years and above, that is, senior citizens and super senior citizens.
One must fulfill the following eligibility criteria to submit Form 15G:
You are an individual or a person (other than a company or a firm).
You must be a resident Indian for the applicable FY
Your age should not be more than 60 years
Tax liability calculated on the total taxable income for the FY is zero
Your total interest income for the financial year is less than the basic exemption limit.
Form 15G has two sections. First part is for the individual who wants to claim no-deduction of TDS on certain incomes. The following are the key details you need to know for you 15 G form fill up:
Name as mentioned on your PAN Card.
Permanent Account Number. Valid PAN card is mandatory to file Form 15G. If you fail to furnish valid PAN details, your declaration will be treated as invalid.
Declaration in Form 15G can be furnished by an individual but not by a firm or company.
The previous year has to be selected as the financial year for which you are claiming non-deduction of TDS.
Mention your residential status as a resident individual because NRI are not allowed to submit Form 15G.
Mention your communication address correctly along with PIN code.
Provide valid email ID and contact number for further communications.
Tick mark ‘’Yes’’, if you were assessed to tax under the provisions of Income Tax Act, 1961 for any of the previous assessment years.
Mention the latest assessment year for which your returns were assessed.
Estimated income for which you are making declaration needs to be mentioned
Total estimated income for the financial year (which includes all the income)
If you have already filed Form 15G anytime during the financial year, then the details of the previous declaration along with an aggregate amount of income need to be mentioned in the present declaration.
Last part of section 1 talks about the investment details for which you are filing declaration. You need to furnish the investment account number (term deposit/ life insurance policy number/ employee code etc)
After filling the entire field, re-check all the details to ensure there is no error. The second part of Form 15G is to be filled out by the deductor i.e. the person who is going to deposit the tax deducted at source to the government on behalf of the tax assessee.
Form 15G is valid for one financial year. You can submit the form 15G at the beginning of the financial year. This ensures that the bank does not deduct any TDS on your interest income.
In case you forget to submit Form 15G on time and TDS has already been deducted, here’s what you can do:
Option 1: Claim your TDS refund by filing income tax return.
Option 2: Immediately submit Form 15G to avoid further deductions for the current financial year.
Providing a false declaration in Form 15G just to avoid TDS can lead to fine and even imprisonment under Section 277 of the Income Tax Act, 1961. The following are the details of punishments u/s 277 of the IT Act, 1961.
Imprisonment for a period of 6 months to 7 years if the wrong declaration was provided to evade tax of more than Rs. 1 lakh
For all other cases, imprisonment is between 3 months to 3 years.
Finance Minister Nirmala Sitharaman on Saturday directed the Goods & Services Tax (GST) organization to hold a special filing demonstration session for new return framework. This activity is expected to get the input before the new documenting system becomes effective from April 1, 2020.
As per the law it is mandatory to file return either on monthly or quarterly basis, based on their turnover.
The Finance Minister met tax assesses in five group to discuss and find ways to further simplify GST forms and make the existing filling process (GSTR 1, GSTR 3B, GSTR 9, GSTR 9c etc) more user friendly. Five bodies demonstrated in real time before the Finance Minister and Senior GST and GSTN officials, the various issues encountered during filling GST forms.
However, there are issues related to certain entries where some amendments have been made, issue of credit note or debit note, matching of input tax credit (ITC) for buyer filing monthly return and seller filing quarterly return and demand to produce physical invoice by tax officials even details mentioned in GST Return Form 2A. There was also a suggestion to further ease co-relation of various forms.
The activities would assist organizations with getting ITC benefits with no problems.
70.22 per cent of the assessees, having an annual turnover of less than ?5 crore and engaged in B2C (business to consumer), B2B (business to business) as well as reverse charge mechanism-based supply activities can opt for quarterly filing of return. This form is called ‘SUGAM’ (RET-3). This is according to the turnover-wise distribution based on GSTR 3B (existing return form) filed during 2018-19.
About 28 per cent of the assessees, with an annual turnover of less than ?5 crore and are engaged in B2C as well as reverse charge-based supply activities. They can opt for ‘SAHAJ’ form (RET-2). All other assessees (engaged in foreign trade or SEZ-based activities) will have to file RET-1. They will be required to file the returns on a quarterly basis but payment of tax dues on monthly basis through a form called PMT-08.
Over 7 per cent assessees with annual turnover of more than ?5 crore. They will have to file the return on a monthly basis through RET-1. These assessees are a small in number, but in terms of overall tax payment they contribute nearly 85 per cent. Under the new system, these assessees will have to file their returns by the 20th of the next month, which means a majority of the collection will be with the Government by that date. For other assessees, the filing date is the 25th of next month.
Under the present framework, one can display two unique figures in GSTR 1 (showing liability) and GSTR 3 B (showing tax payment) as they are not linked automatically. Thus, one could show higher liability,claim higher input tax credit and pay less tax. In any case, this will be not be possible under new system.Through the RET-1/2/3, the taxpayer pays the auto-populated risk (from ANX-1) by using money and ITC (auto-populated through ANX-2) both. Additionally, only the creator of the form will be able to amend the details.
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