This case is regarding the Form GSTR 3B. A lot of discussions and discrepancy took place whether FORM GSTR 3B is a return or not. There was also a confusion whether GSTR 3B is a substitution of GSTR 3 or not. GSTR 3B is a simple summary return that all normal tax payers must file monthly for the nine month period of July 2017 to March 2018. On this form the tax payers summarize and report the total values of purchases and sales without needing to list the invoice. This was introduced by the Central Board of Excise and Customs (CBEC). The GSTR 3B is filed by all registered taxpayers except input service distributors, composition dealers, suppliers of online information and database access or retrieval services and non resident taxable persons. The due date of GSTR 3B is by the 20th of the following month. For example for January 2018 the GSTR 3B is 20th February 2018.
On 18th of october 2018, there was a press release which was issued by the Central Board of Indirect Taxes and Customs (CBIC). In the press release the Central Government clarified that the last date of availing Input Tax Credit in respect of invoices or debit notes regarding the Financial Year period from July 2017 to March 2018 would be before the due date of furnishing return according to the Section 39 of the Central Goods and Sevices Act 2017. The date for the month of September 2018 would be October 20, 2018. This created a huge confusion that whether GSTR 3B is a return prescibed under Section 39 of the Central Goods and Services Act 2017, or it is the substitution of GSTR 3.
The GST authority stated that if Section 16(4) of the Central Goods and Services Tax is analyzed, then one can obseve that the last date to avail the Input Tax Credit for the invoices of a particular financial year would be the due date of filing return under Section 39 of CGST Act 2017 or Annual return or whichever is earlier. Section 16(4) of the CGST Act states that no ITC can be availed on basis of any invoices or debit note for supply of goods or services or both after the due date of filing of the return as per Section 39 of this Act, for the month of September following the Financial Year, to which such invoices or debit notes suffices or filing of the Annual return or whichever is earlier. Now Section 39 of the CGST Act does not specify any specific name for the retuirn that to be filed under this Section. But there are some conditions that are required to be fulfilled; they are inward and outward supplies of goods, ITC availed and tax payable and tax paid. It is observed that FORM GSTR 3B suffices all the conditions that are needed to be fulfilled under Section 39 of the CGST Act. Thus, FORM GSTR 3B is the return to be filed under Section 39 of the CGST Act. The GST authority also stated that the furnishing of outward details in the FORM GSTR 1 or FORM GSTR 2A anyhow does not impact the registered tax payers to avail ITC on self assesment basis. Now on 31st of December 2018 an order No. 2 was passed by the Central Board of Tax stating that in Section 16(4) of the CGST Act a proviso woulbe inserted which states that any registered person shall be entitled to take input tax credit after the due date of furnishing of the return under Section 39 of the CGST act for the month of September 2018 till the due date of furnishing return for the month of September 2018 under the said section for the month of March 2019 in respect of any invoice or invoice relating to such debit note for the supply of goods or services or both made during the financial year of 2017-2018 the details of which have been uploaded by the supplier under Section 37(1) till the due date for furnishing the details under sub section (1) of Section 37 for the month of March 2019.
The case reached the court because of the confusion that was created due to the press release. The honourable Gujrat High Court held that the press release which happened on 18th of october 2018 will be only held valid and in consonance of Section 16(4) of the CGST Act 2017 if the FORM GSTR 3B is to filed under Section 39 of the CGST Act. The Court also held that filing of returns under FORM GSTR 3 and FORM GSTR 2 were temporarily kept in suspension due to some technical glicthes in the GST Portal and FORM GSTR 3B is not to be considered as a substitution of FORM GSTR 3. FORM GSTR 3B is only issued for a short period of time for filing returns. The Court further stated about the notification which was issued by the Central Board of Indirect Taxes . The No. 10 notification in 2017 of the CBIC stated that FORM GSTR 3 will have a retrospective effect once it comes into validity again and it will take over GSTR 3B.Finally, after looking into all the aspects the honourable Gujrat High Court held that FORM GSTR 3B cannot be considered as a monthly return as it is contrary to the provisions of Section 16(4) of the CGST Act if read with Rule 61 of the said Act. However, there was lately an amendment of Rule 61 of the CGST Act which might make FORM GSTR 3B as valid. The honourable Supreme Court has stayed the Gujrat High Court Order regarding GSTR 3B.