Section 43A of GST
(1) Notwithstanding anything contained in sub-section (2) of section 16, section 37 or section 38, every registered person shall in the returns furnished under sub-section (1) of section 39 verify, validate, modify or delete the details of supplies furnished by the suppliers. (2) Notwithstanding anything contained in section 41, section 42 or section 43, the procedure for availing of input tax credit by the recipient and verification thereof shall be such as may be prescribed. (3) The procedure for furnishing the details of outward supplies by the supplier on the common portal, for the purposes of availing input tax credit by the recipient shall be such as may be prescribed. (4) The procedure for availing input tax credit in respect of outward supplies not furnished under sub-section (3) shall be such as may be prescribed and such procedure may include the maximum amount of the input tax credit which can be so availed, not exceeding twenty per cent. of the input tax credit available, on the basis of details furnished by the suppliers under the said sub-section. (5) The amount of tax specified in the outward supplies for which the details have been furnished by the supplier under sub-section (3) shall be deemed to be the tax payable by him under the provisions of the Act. (6) The supplier and the recipient of a supply shall be jointly and severally liable to pay tax or to pay the input tax credit availed, as the case may be, in relation to outward supplies for which the details have been furnished under sub-section (3) or sub-section (4) but return thereof has not been furnished. (7) For the purposes of sub-section (6), the recovery shall be made in such manner as may be prescribed and such procedure may provide for non-recovery of an amount of tax or input tax credit wrongly availed not exceeding one thousand rupees. (8) The procedure, safeguards and threshold of the tax amount in relation to outward supplies, the details of which can be furnished under sub-section (3) by a registered person,—
(i) within six months of taking registration; (ii) who has defaulted in payment of tax and where such default has continued for more than two months from the due date of payment of such defaulted amount, shall be such as may be prescribed.”]
Introduction
This is a new provision that was introduced vide CGST Amendment Act, 2018 but among various provisions that were notified from 1 Feb 2019 vide 2/2019-Central Tax dated 29 Jan 2019, this section was excluded and NOT been notified. As a result, the procedure of furnishing returns and the method of appropriation of credit as prescribed under this section are NOT APPLICABLE. Procedure prescribed for furnishing return in rule 61 and method of appropriation of credit in rule 88A ONLY WILL APPLY.
Analysis
‘Return’ in GST assumes far greater responsibility and authority than under earlier laws. GST Return is not a procedure to be disclosed what has been done but the prescribed way for:
admitting liability on outward supplies and RCM inward supplies; and declaration of eligibility to credit and registering the claim for credit. At the outset, this section overrides the following sections: Section 16(2) which lays down the conditions linked to claim of input tax credit (discussed as ‘vesting conditions’ under section 16); Section 37 which prescribes the requirement to file GSTR 1 in respect of outward supplies; Section 38 which prescribes the requirement to file GSTR 2 in respect of inward supplies.
And mandates that a return filed under section 39(1) MUST BE verified, validated, modified or deleted in respect of those details. This should some understanding and appreciation of the ‘role’ envisioned in Legislature for ‘returns’ in GST law. From the terms laid down in section 43A, it becomes clear that:
ADMISSIONS of liability on outward supplies will be in the returns filed; and CLAIM of input tax credit on ‘eligible’ inward supplies will be in the returns filed.
Experts are unanimous that no liability can be sustained unless there is an actual underlying supply in real terms. Mere reporting error cannot bring into existence liability on non-existent supplies.
Section 29 of GSTSection 30 of GSTSection 33 of GSTSection 34 of GSTSection 35 of GSTSection 36 of GSTSection 37 of GSTSection 38 of GSTSection 42 of GSTSection 43 of GST
