Q. 662 We have received GST Notice (ASMT-10). As per notice in the f.y. 2017-18 it is stated that ITC as per GSTR3B is Rs.98,76,941 & and as per GSTR2A Rs.98,71,501.79, difference of Rs.5439.21. Officer has asked the explanation for this difference. As per our record we have reversed the difference amount of Rs. 5439.21 in March 2020 – 3B return. Let us know how we should reply and also whether the department will ask for interest payment. Kindly advise.

Ans. Yes, interest needs to be discharged. You are required to prepare ITC reconciliation for the differences appearing in the said returns. 

Q. 661 Whether delegate fee or conference participation fee for a study seminar/ conference liable to be taxed under GST if the conference is organised by a hospital providing medical care services or an educational institution providing degree courses ?

Ans.Yes, GST is applicable, hence taxable. 

Q.660 Please provide an illustration for the computation of ITC to be reversed as per rule 42 with various scenarios . please make an index of previously answered queries.

Ans. Illustration : A garment factory receives a Government order for making uniforms for a commando unit. This supply is exempt from tax under a notification issued under section 11 of the CGST Act. The fabric is exclusively procured for such supply, but thread and lining material for the collars are the ones which are used for other taxable products of the factory as well.

The turnover (exclusive of taxes) of the other products of the factory and exempted uniforms in July is` 4 crore and` 1 crore respectively, the ITC on thread and lining material procured in July is` 5000 and` 15000 respectively. Calculate the amount of eligible ITC in respect of procurement of thread and lining material

Solution: Thread and lining material are inputs which are used for making taxable as well as exempt supplies. Therefore, credit on such items will be apportioned and credit attributable to exempt supplies will be reversed in terms of rule 42.

Credit attributable to exempt supplies = Common credit x (Exempt turnover/ Total turnover) Common credit = ` 15,000 + ` 5,000 = ` 20,000 Exempt turnover = ` 1 crore Total turnover = ` 5 crore [` 1 crore + ` 4 crore] Credit attributable to exempt supplies = (` 1 crore /` 5 crore) x ` 20,000 =` 4,000. Ineligible credit of ` 4,000 will be reversed in Form GSTR-3B. Credit of` 16,000 will be eligible credit for the month of July.