GST ITC-03

This is the form which a taxpayer has to file who has opted for a composition scheme if he has to reverse the ITC claimed by him.

Case 1- When a composition dealer claims ITC but there is non-availability of tax after some time then ITC has to be reversed.

Case 2- when there is a transaction of taxable supply but those goods or services become exempt after some time then he has to file form-03 so that ITC can be reversed.

•  Who should file ITC-03

Payments may be on the account of ITC on:

1. Input held in stock
2. Input contained in semi-finished goods or finished goods held in stock
3. Capital goods held in stock

• The due date for filing the ITC

The time limit to file form ITC-03 after filing form CMP-02 for FY 2020-21 by 30th June 2020 has been extended till 31st July 2020 for taxpayers freshly opting for the composition scheme.

• Conditions/Prerequisites to be fulfilled to fill ITC-03

1. The input tax credit should have been claimed earlier
2. The dealer must have opted for a composition scheme at the starting of this year.
3. Must have a digital signature certificate or electronic verification code.
4. If invoices are not available then a certificate from a Chartered Accountant is needed certifying the value of goods.

• Frequency of filling ITC

Generally, ITC-03 can be filled once in a financial year, but if goods on which ITC is claimed become exempt or taxable more than one time then the taxpayer can file it more than one time for the reversal or payment of tax.

• Need for cash in electronic cash ledger and raising challan

Every taxpayer has to pay off his liabilities while filling for the ITC-03 and if the cash in the electronic ledger is short for the payment then we have to create a challan for the additional cash needed to be added.

• What happens after Form GST ITC-03 is filed?

       After Form GST ITC-03 is filed:

1. ARN will be generated in the GST portal and the same will be communicated to Taxpayer by SMS and E-mail, on their registered mobile number and e-mail id respectively.
2. Balance of credit lying in Electronic Credit Ledger will lapse on the filing of this form, after ITC reversal /payment of tax, in case of Opt-in for composition scheme.

• Conclusion

If a taxpayer has to file this form because he has opted for a composition scheme, then he has to file the form within 60 days from the commencement of the financial year. And if CMP 02 has been filed before March 31, 2018, then ITC 03 has to be filed within 180 days of commencement of the scheme. If the taxpayer has claimed ITC in any of that good or service that becomes exempt then ITC-03 should be filled as the government notifies the same.