The GST branch of Kerala has declared the introduction of Standard Operating Procedures (SOPs) to track taxpayers’ corrections of improper IGST Input Tax Credit (ITC) reversals by using the GSTR-3B form.
A streamlined summary tax return form GSTR-3B, enables taxpayers to report the total unpaid GST liabilities for a particular tax period. It is mandatory for a taxpayer to submit the GSTR-3B form every fiscal period.
With examples, it will be easy to understand, that the SOP clarifies the statutory requirements.
The purpose of this SOP is to ensure that IGST credits that are determined to be ineligible for taxpayers are reversed correctly and quickly. As a result, it ensures that the state share is used to settle 50% of the IGST credit monthly rather than on an ad-hoc basis each year.
In the previous Trade Circular No.1/2022, dated November 21, 2012, we provided instructions for providing accurate and appropriate information regarding blocked or ineligible input tax credits.
Regarding the reversal monitoring procedure specified in the standard operating procedure (SOP), which must ensure the inflow of IGST Credit eligible to the State, the taxpayers must take the following actions to ensure accurate GSTR 3B disclosure:
- Identification of cases for scrutiny
- Appointment of the appropriate officer for scrutiny and subsequent tracking
- Establishment of a scrutiny schedule
- Execution of the scrutiny process
- Implementation of further measures
A verification register must be maintained for each GSTIN designated for verification so that verification and monitoring can be carried out. During the verification stage of a case, the District Joint Commissioners of Taxpayer Services should monitor its progress.
Additionally, at the conclusion of each month, the appropriate officer is required to compile a Verification Progress Report and send it to the District Joint Commissioner, who in turn is responsible for submitting a consolidated verification report to the Commissionerate.
