Kerala GST department issues guidelines on scrutiny of returns

Kerala GST department issues guidelines on scrutiny of returns

A registered person not entitled to take Input Tax Credit

The Kerala Goods and Service Tax (GST) Department has issued guidelines regarding the procedure to be followed in the scrutiny of returns. As per the sections, a registered person will not be entitled to take Input Tax Credit (ITC) in relation to any invoice or debit notes.

This would include the supply of service received from Special Economic Zones (SEZ) after the due date of furnishing the return for the month of September of the succeeding financial year or an annual return for the relevant financial year, whichever is earlier.

If any taxpayer availed ITC on business-to-business (B2B - Regular) invoices or debit notes including supply of service received from SEZ beyond the aforesaid due dates, the same would be disallowed and notice could be issued.

The ITC on capital goods can be credited to the Electronic Credit Ledger (ECL) in full in the month of inward supply made and the proportionate ITC, of the said capital goods, not related to the taxable supply/nonbusiness purpose.

Such taxable persons are required to reverse the proportionate ITC of the tax involved on the said capital goods in the ratio of taxable/exempt and business /non-business supply for the succeeding 60 months.

Notice can be issued in such cases where discrepancy notice was issued and pending further proceedings. For verification and accurate calculation under this parameter, the designated officer can call for related documents from the taxpayer by issuing a letter.