Explain how CA. Avinash will respond to the issues raised by the GST Superintendent, considering relevant provisions of the GST law. Also, determine…

S No. Particulars Amount of reversal (₹) (i) If a registered person, who has availed of ITC on any inward supply fails to pay to the supplier thereof, the amount towards the value of such supply along with the tax payable thereon, within 180 days from the date of issue of invoice by supplier, shall pay or reverse an amount equal to the ITC availed in respect of such supply along with interest payable thereon under section 50, while furnishing the return in Form GSTR-3B for the tax period immediately following the period of 180 days from the date of the issue of the invoice. Date of issue of invoice-25.10.2021 Period of 180 days expire on 23rd April, 2022 1 Amount of input tax credit to be reversed in respect of (i) (₹ 78,00,000 x 18%) 14,04,000 The amount of 14,04,000 to be reversed in the Form GSTR-3B. 2 Interest payable due to non-reversal of ITC from the date of utilisation of credit till the date of reversal.14,04,000 x 18% x 181/365 (Date of availment of ITC, i.e. 20.11.2021 till 20.05.2022) = 1,25,321 (rounded off) This answer is based on the view that input tax credit availed by DSL has been reversed after the expiry of 180 days from the date of invoice since company had not made payment of value and tax to the Supplier within the prescribed period of 180 days. Henceforth, the interest payable due to non reversal of ITC on account of non payment to the supplier within 180 days shall be calculated for the period starting from the date of utilisation of such input tax credit (20.11.2021) till the date of reversal of such credit (i.e. 20.05.2022 3 being the due date of filing of return for the month of April, 2022 as the period of 180 days expires on 23.04.2022). Alternatively, it is also possible that input tax credit availed by DSL has NOT been reversed after the expiry of 180 days from the date of invoice and it came to the notice of the company only upon Superintendent's intimation. In that case, the interest payable due to non reversal of ITC on account of non payment to the supplier within 180 days shall be calculated for the period starting from the date of utilisation of such input tax credit (20.11.2021) till the date of filing of GSTR-3B for August, 2022 (i.e. 18.09.2022 being the actual date of filing of return for the month of August, 2022). Total interest in that case would be-14,04,000 x 18% x 302/365 (Date of availment of ITC, i.e. 20.11.2021 till 18.09.2022) = 2,09,100 (rounded off) (ii) The input tax credit in respect of food and beverages used in a canteen amounting to is blocked as the same is not obligatory for an employer to provide the same to its employees under any law. Thus, ITC in respect of the same need to be reversed and interest as applicable will be paid. 14,22,000 [₹ 6,72,000 +7,50,000] (iii) ITC in respect of travel benefits extended to employees on vacation such as leave is blocked under GST law as the same is not obligatory for an employer to provide the same to its employees under any law. Thus, ITC in respect of the same need to be reversed and interest as applicable will be paid. 6,48,000 (iv) ITC of 12,96,000 in respect of buses is allowed as seating capacity is 30 persons. ITC is not allowed on services of general insurance and repair and maintenance relating to cars, ITC on which is not allowed. Thus, same needs to be reversed. 96,000 (v) ITC outdoor catering services is blocked as the same is not obligatory for an employer to provide the same to its employees under any law. 1,26,000 Total amount of input tax credit to be reversed 36,96,000 GST Form to be used to pay demand: Company will deposit the GST on account of reversal of ITC and payment of interest in Form GSTR-3B