Income Tax effect if GST ITC claimed Late in Next Financial Year
If Input Tax credit has not been claimed in same Financial year , then it can be claimed in the Next Financial year as per provision as mentioned in Section 16(4) of CGST Act, 2017.
A registered person shall not be entitled to take input tax credit in respect of any invoice or debit note for supply of goods or services or both after the due date of furnishing of the return under section 39 for the month of September following the end of financial year to which such invoice or invoice relating to such debit note pertains or furnishing of the relevant annual return, whichever is earlier.
The due date of relevant return (GSTR 3B) for the month of September 2018 is 20/10/2018.
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Expenses & Purchases not entered in Books in Financial Year
Sometime expense/inward supplies for example office maintenance, carriage outwards, printing & stationery etc may not be recorded in the books of accounts.
Expense must be recorded in the accounting period to which it pertains to claim these expenses under Income Tax
Treatment under GST
ITC can be taken in the GST return (GSTR 3B) in next financial year upto the due date of furnishing of the return under section 39 for the month of September 2018 (upto 20th October )
Treatment under Income Tax
Missed expenses being a prior period item shall be recorded as such in the books of accounts.Prior period items are disallowed as per Income Tax Act and therefore no deduction would be available in that respect.
Note : GSTR-9 (GST Annual Return) contains a table (i.e. 8C) requires the information of ITC on inward supplies (other than imports and inward supplies liable to reverse charge but includes services received from SEZs) received during 2017-18 but availed during April to September, 2018. Thus Govt can track all the information of prior period expenses recorded in the subsequent year.
Capital Goods not entered in Books in Financial Year
This is the case where purchase of capital goods was not recorded in the books of accounts.
Case -1 : Capital Goods recorded at COST Plus GST i.e. GST amount is capitalised
Section 16(3) of CGST Act, 2017 reproduced hereunder:
Where the registered person has claimed depreciation on the tax component of the cost of capital goods and plant and machinery under the provisions of the Income-tax Act, 1961, the input tax credit on the said tax component shall not be allowed.
Case -2 : Capital Goods recorded at COST (excluding GST) and GST amount is capitalized Claimed as Input Tax Credit
Treatment under GST
ITC can be taken in the GST return (GSTR 3B) in next financial year upto the due date of furnishing of the return under section 39 for the month of September 2018 (upto 20th October )
Treatment under Income Tax : Depreciation pertaining to the relevant year will be disallowed as per Income Tax Act on value of capital goods ( excluding GST ) and therefore no deduction would be available in that respect.
Expense/ Purchase/ Capital Goods entered correctly in books of accounts but ITC not taken
Treatment under GST
ITC can be taken in the GST return (GSTR 3B) in next financial year upto the due date of furnishing of the return under section 39 for the month of September 2018 (upto 20th October )
Treatment under Income Tax
No affect . As expenses were recorded correctly in Books of Accounts