All about the Deadline Extension for ITC

by CCH Online CCH Tax Online

The Finance Ministry of India extended the deadline for filing summary sales return to October 25^th. This was applicable for taxpayers filing their returns under GSTR-3B for September. Through this extension, businesses could claim ITC (Input Tax Credit) for the period of Jul 17 – Mar 18.

Initially, businesses had concerns about the previous deadline of October 20^th. With the deadline extension, larger companies had more flexibility in obtaining the right credit this year. The last date for availing ITC has also shifted to December 31 or date of filing of annual return (period Jul 17 – Mar 18) for businesses that have recently migrated to GST.

GST laws in India have made it simpler for businesses to apply for ITC, making businesses flourish under this system. With the economy becoming increasingly digital, there are multiple provisions offered to businesses that are registered.

There are some concerns with regards to amendment of the return to avail ITC benefits. Several companies have already filed their returns and aren’t able to claim the credit under the deadline extension. However, the Central Board of Indirect Taxes and Customs (CBIC) had expressed the need to extend the deadline so that all businesses can claim ITC under GST.

The deadline was extended done, in part, to align the summary sales return (GSTR-3B) with the ITC claim under the same deadline. This is a smarter move to make the process that much simpler for businesses under GST.

The extension also comes as a sign of positivity for many businesses that hadn’t filed their claims yet. Many businesses are still understanding how to stay compliant across all stages under GST. That’s where knowledge platforms keep taxpayers and accounting managers abreast of all movements in the industry.

An incorrect claim of ITC becomes expensive at 24% interest level. Therefore, tax payers needed more time to file the right claim. As there was much discussion around the 5-day time between filing of Income Tax Return and Audit report (Oct 15) and ITC (October 20), the government decided to shift the deadline forward.

There has also been some criticism offered in terms of no benefits being given to fully compliant entities. Those that have already filed their claims don’t receive any positive share of the benefits. Several companies have a dedicated staff to ensure compliance to all GST legalities. However, in the broader scheme, this is a positive move that is seen to be highly pragmatic of the government in this business climate. Businesses can easily apply for GST registration, as the process of filing, documentation and claims has extended online. The process is that much simpler, and business can avail benefits accordingly.