374 October 20 To October 26, 2018 u Taxmann’s Corporate Professionals Today u Vol. 43 u^16
u In Books of Account: 10,000 will be booked as an expense in the books of account during the F.Y. 2018-19 and, as per Accounting Standard- 8, shall be shown separately in such P&L Account as ‘Prior period expense of F.Y. 2017-18, 1,800 will be shown as ‘Input
Tax Credit Receivable’ in the Current
Assets during the F.Y. 2018-19.
u In Income Tax: ` 10,000, booked as expense
in the P&L Account, is a non-allowable
expenditure or it may be claimed as
per Point A(iii) above.
5.1-1-2 ERRORS DETECTED AFTER 20 OCT.,
2018, SAY NOV., 2018:-
u In GST: The ITC of ` 1,800 will not be
allowed as per Section 16(4) of the
CGST Act.
In other words, the ITC pertaining to
the F.Y. 2017-18 is allowable till the
due date of return for the month of
September 2018, i.e., 20th October, 2018.
u In Books of Account: 10,000 and 1,
will be booked as expenses in the P&L
Account of F.Y. 2018-19 and, as per
Accounting Standard-8, shall be shown
separately in such P&L account as
‘Prior period expense of F.Y. 2017-18.
u In Income Tax: 10,000 and 1,800,
booked as expenses in the P&L Account,
is a non-allowable expenditure or it
may be claimed as per Point A(iii)
above.
5.1-1-3 ERRORS WHERE LIABILITY IS PAID
UNDER REVERSE CHARGE MECHANISM:-
u In GST: Mr. B was liable to pay GST
under Reverse Charge Mechanism (RCM)
in February, 2018, for the goods or
services specified under section 9(3) of
the CGST Act, and section 9(4) of the
CGST Act (applicable up to 12.10.2017)
but did not record the expenses in F.Y.
2017-18 and the errors were detected
in F.Y. 2018-19.
So, Mr. B shall be required to pay the GST
liability along with the interest @ 18%, in
Form GSTR-3B for the month in which the
error is detected. Further, the availment
of ITC of the GST paid under RCM will
depend upon the month in which the error
is detected, which is already discussed in
points (a) and (b) above.
u In Books of Account: The treatment of
such expenses in Books of Account will
be same as discussed in points (a) and
(b) above for different tax periods.
u In Income Tax: The treatment of such
expenses under the Income Tax Act
will be same as discussed in points (a)
and (b) above for different tax periods
and the same would be disallowed.
Over Reporting of ITC
If due to any error, Mr. B over-reports the
ITC in F.Y. 2017-18 and the error is detected
in F.Y. 2018-19, then Mr. B shall be liable to
pay such ITC along with the interest @ 18%.Prior period incomes
- Mr. A omits to book the income of
11, (10,000 plus GST @ 18%) in his books of
account in February, 2018 and such error is
detected at any time during the subsequent
year.
u In GST: The GST liability of1, shall be reported by Mr. A in Form GSTR-3B for the month in which the error is detected and shall be paid along with the interest @ 18%. u In Books of Account:10,000 will be
booked as an income in the Profit and
Loss Account of F.Y. 2018-19 and shall
be shown separately in such P&L Ac-
count as ‘Prior period income of F.Y.
2017-18’, as per Accounting Standard- 8.
u In Income Tax: Income-tax will be levied
on ` 10,000 in F.Y. 2018-19, unless
objected to by the assessing authority.
PriOr PeriOd exPenses - gsT PersPeCTiVe