Question

Dealer has failed to filed ITC 1 within one month from date of opting into regular scheme. Tax is around 6-7 lacs. Now what are the options

Answer

Section 18(1) of CGST Act allows ITC of inputs held in stock and inputs contained in semi-finished or finished goods held in stock subject to the conditions:
a) a person who has applied for registration under this Act within thirty days from the date on which he becomes liable to registration and has been granted such registration shall be entitled to take credit of input tax in respect of inputs held in stock and inputs contained in semi-finished or finished goods held in stock on the day immediately preceding the date from which he becomes liable to pay tax under the provisions of this Act;

b) a person who takes registration under sub-section (3) of section 25 shall be entitled to take credit of input tax in respect of inputs held in stock and inputs contained in semi-finished or finished goods held in stock on the day immediately preceding the date of grant of registration;

Rule 40 of CGST Rules prescribes the manner of claiming of the credit and requires filing of Form GST ITC-01 within 30 days or within the period prescribed in the Notification issued by Commissioner.

Please check whether there is any Notification for extension of time issued by Commissioner of your Jurisdiction. As per our information in most of the cases no such notification is issued.

We will suggest you to file ITC-01 even if it is late, if the same is permitted on the portal and not blocked. If it is blocked on the portal, then file a hard copy of the same with the Jurisdictional GST Officer. Although according to the provision it may be disallowed but we are of the opinion that you can claim it with some follow up with Jurisdictional Commissioner even if it is disallowed. Go for litigation because substantial benefit of ITC cannot be disallowed for procedural lapses. There are bright chances of decision of Show cause notice in your favour.
 

(Reply dt. 19.06.2018)