Eligibility and Conditions for taking Input Tax Credit
(1) Every registered person shall, subject to such conditions and restrictions as may bePrescribed and in the manner specified in section 49, be entitled to take credit of input Taxcharged on any supply of goods or services or both to him which are used or Intended to be used in the course or furtherance of his business and the said amount shall be credited to the electronic credit ledger of such person.
(2) Notwithstanding anything contained in this section, no registered person shall be entitled to the credit of any input tax in respect of any supply of goods or services orboth to him unless, ––
(a) he is in possession of a tax invoice or debit note issued by a supplier registered under this Act, or such other tax paying documents as may be prescribed;
(b) he has received the goods or services or both. Explanation — For the purposes of this clause, it shall be deemed that the registered person has received the goods where the goods are delivered by the supplier to a recipient or any other person on the direction of such registered person, whether acting as an agent or otherwise, before or during movement of goods, either by way of transfer of documents of title to goods or otherwise;
(c) subject to the provisions of section 41, the tax charged in respect of such supply has been actually paid to the Government, either in cash or through utilisation of input tax credit admissible in respect of the said supply; and
(d) he has furnished the return under section 39: Provided that where the goods against an invoice are received in lots or instalments the registered person shall be entitled to take credit upon receipt of the last lot or instalment:
Provided further that where a recipient fails to pay to the supplier of goods or services or both, other than the supplies on which tax is payable on reverse charge basis, the amount towards the value of supply along with tax payable thereon within a period of one hundred and eighty days from the date of issue of invoice by the supplier, an amount equal to the input tax credit availed by the recipient shall be added to his output tax liability, along with interest thereon, in such manner as may be prescribed:
Provided also that the recipient shall be entitled to avail of the credit of input tax on payment made by him of the amount towards the value of supply of goods or services or both along with tax payable thereon.
(3) Where the registered person has claimed depreciation on the tax component of the cost of capital goods and plant and machinery under the provisions of the Income-tax Act, 1961, the input tax credit on the said tax component shall not be allowed.
(4) A registered person shall not be entitled to take input tax credit in respect of any invoiceor debit note for supply of goods or services or both after the due date of furnishing of the return under section 39 for the month of September following the end of financial year to which such invoice or invoice relating to such debit note pertains or furnishing of the relevant annual return, whichever is earlier.
Issues
1. As per Section 16(2)[c] – for claiming ITC the tax charged in respect of such supplyhas been actually paid to the Government,- How a person who is claiming can get this information ? Just 3B return filed does not give authentication that vendor has deposited tax with Government.
2. As per Section 16(4) last date to claim ITC is furnishing of the return under section 39 for the month of September following the end of financial year to which such invoice or invoice relating to such debit note pertains or furnishing of the relevant annual return, whichever is earlier. So for financial year 2017-18 last date for September Month Return filling is 20.10.18 – How a person can know about missed ITC without finalization of audited accounts.
For claiming ITC Reconciliation with GSTR 2A is important aspects – As we know GSTR 2A extract data from GSTR 1 filed by supplier . as Due date to file GSTR 1 is Dec 18 ( Newly Migrated Assessee )and 31-10-18 for other Regular assess – we will not get Correct 2A so we wecan not our missing ITC ?
3. Filling of GSTR 1 including Amendment for 17-18 due date is 31.10.18 and submission of Audited financials are also 31-10-18 so how both can be closed on same day as GSTR 1 need to filed along with Reconciliation from Audited financials.
4. System does not allow us to make amendment any time it need to be done alongwith Due GSTR 1- which restricts us to file amendment in GSTR 1.
Remedy-
- Please remove condition of payment of taxes to government by vendor to claim ITC by recipient
- Allow availmentof ITC till filling of Annual Return.
- Please allow amendment in GSTR 1 anytime not linked with SubseqentReturn .
- Please allow amendment even after submission of annual Return as GSTR 1 is just a annexure to Monthly Return ( B To B Amendment , B To C amendment or C To B amendment ) with no additional Tax liability.
Thanks & Regards
CA PreetamBatra
Batra & Batra Chartered Accountant
968 958 1000
