Section 148: Special Procedure for Rectifying ITC Mismatches
The GST Council has brought an exclusive procedure through Section 148 of the CGST Act, 2017, to rectify the past mismatch on ITC claims in FYs 2017-18 to 2020-21. Amendments in Sections 16(5) and 16(6) of the CGST Act to be retrospectively effective allow taxpayers to avail of ITC under certain conditions. These rectification orders by way of Notification No. 22/2024 and Circular No. 237/31/2024 are designed to deal with the mistakes in orders passed under Sections 73, 74, 107, or 108 in cases of ITC availed based on Section 16(4).
The application for rectification has to be submitted electronically within six months from the date of notification on the GST portal, and an order of rectification shall be passed within three months from the date of receipt. Rectification forms GST DRC-08 and GST APL-04 have been updated to reflect these changes. Scenarios include pending demand notices, pending appeals, and no appeals filed. Businesses must take a closer look at such provisions to maintain non-compliance and solve past disputes over ITCs effectively.These procedures clarify the method, making it easier and more uniform to follow, and assist taxpayers in using this tool to settle GST disputes.
Analysis of a Special Procedure for the Rectification of Orders Notified Under Section 148 of the CGST Act, 2017 (Relief from demand created due to incorrect availment of ITC for FY 2017-18, 2018-19, 2019-20, and 2020-21 in violation of Section 16(4)) Analysis of a Special Procedure for the Rectification of Orders Notified Under Section 148 of the CGST Act, 2017 (Relief from demand created due to incorrect availment of ITC for FY 2017-18, 2018-19, 2019-20, and 2020-21 in violation of Section 16(4)) At its 53rd meeting on June 22, 2024, the Goods and Services Tax (GST) Council proposed a relaxation in the condition of section 16(4) of the Central Goods and Services Tax (CGST) Act, 2017 (hereinafter referred to( “the Act”) throughout the initial years of GST implementation, namely fiscal years 2017-18, 2018-19, 2019-20, and 2020-21.
The Council proposed that the time restriction for claiming ITC on any invoice or debit note under Section 16(4) of the Act, through any return in FORM GSTR-3B filed up to November 30, 2021, for the aforementioned fiscal years be assumed to be November 30, 2021. It also suggested a conditional easing of the provisions of Section 16(4). since the registered persons whose registrations have been canceled may file returns for the period commencing on the date from which the cancellation takes effect and ending on theIf these returns were submitted within 30 days of the revocation order, the date of revocation will be used. To make these modifications, the Council suggested a necessary retrospective revision to Section 16(4) of the CGST Act, effective July 1, 2017.