Redraft Rule 1(2) of GST ITC Rule to allow credit to Registered person- ICAI – GST Rules Issue 16

By | May 10, 2017
(Last Updated On: May 10, 2017)

Documentary evidence for claiming credit by registered person

Rule 1(2) of draft GST ITC Rules provides that Input tax credit shall be availed by a registered person only if all the applicable particulars as prescribed in Chapter —- (Invoice Rules) are contained in the said document, and the relevant information, as contained in the said document, is furnished in FORM GSTR-2 by such person.

Issue

The condition being placed on the recipient of ensuring all the prescribed particulars as prescribed are contained in the said document is unjustified since it is the duty of supplier to include all the necessary particulars in the Invoice. A recipient cannot be punished for the mistakes of supplier. Submission of prescribed particulars by the recipient in GSTR-2 should be enough compliance for him to take the credit with other conditions as prescribed under Section 16, Section 17 and Section 18 of the law.

Further, the GSTR 2 return only provides a field which is Yes/ No in determining the eligibility of credit. The field Yes does not distinguish the quantum of Common Credit / Zero Rated Supply Credits and hence linking this to the GSTR 2 return is not practical until and unless the fields are modified in the GSTR 2 returns.

Suggestions

It is suggested that in order to rationalise the provisions and remove the undue hardship on the recipient the rule 1(2) be redrafted as follows: –

Input tax credit shall be availed by a registered person only if all the relevant information, as contained in the invoice, is furnished in FORM GSTR-2 by such person.

Source ICAI Suggestions on GST Rules Submitted to Govt of India

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