Input Tax Credit
Query (Issue) Started By: – santosh phulse Dated:- 4-9-2016 Last Reply Date:- 5-9-2016 Goods and Services Tax – GST
Got 15 Replies
GST
"According to the existing provisions under the draft law, the buyer can claim input tax credit only if the seller or provider of the goods or services has paid the tax charged for such goods or services.This has put the onus of ensuring compliance with the customer or buyer of the goods and services."
-This particular clause in the draft GST law seems unfair to the business community and should be removed.
Reply By KASTURI SETHI:
The Reply:
Dear Sir,
This has been proposed to be enacted in GST in order to make the facility of cenvat credit fool proof. In the present Cenvat Credit Rules, earlier also onus was cast on the person who avails Cenvat Credit.
Reply By CS SANJAY MALHOTRA:
The Reply:
Dear Sh. Santosh ji,
Tax credit provisions are defined considering the Tax leakages and Revenue protection. If suppl
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
s with TIN in his return and shows the tax that it he has paid, based on which the authority with the help of system does cross checking as to whether the TIN of purchaser is appearing in the details and allow the credit if appears. If there is any difference in the tax amount shown by the supplier with the credit amount claimed by the purchaser then the purchaser in order to claim set off has to get written confirmation from the supplier and produce the same before the authority to become eligible to claim the set off.
In GST, as well, the same system as that of VAT is proposed. An assessee shall get tax credit of those tax which he has paid on his purchases only when the supplier has paid the tax. This would be monitered through VAT Credit Ledger in GSTN.
An assessee might think that his primary motive is to carry out business and not to check whether his counter party has paid the tax collected or not. But if we think from the eyes of authority then we can understand that for tax
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
s, the Delhi VAT Department had come with a unique feature in its VAT Laws to reconcile the 2A and 2B statements and in recent time, the DVAT Department has come with coding systems of items which shall be mentioned in the purchasers' and sellers' return and invoices to reconcile the correctness of transactions.
Even in earlier times the Central Excise Department to check the availed Modvat Credit and Modvat credit availed above ₹ 10000/- the details/xerox copies used to send the seller's jurisdictional Range Office for its authenticity.
This is not a new feature which has been incorporated in the GST Model Law. As rightly indicated by Mr. Ganeshan, by doing so, the interest of our Country in tax matter has been taken care of.
Reply By santosh phulse:
The Reply:
Respected Sir,
If a supplier has failed to furnish the return on time or pay tax on time, the government should penalise the supplier instead of the buyer. “This clause is especially harsh on small and m
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
ike mention here that similar fear was there when TDS was made online, it is rare or few exceptions may be there, but substantially, there is no complaint that the deductor of TDS has not uploaded the TDS details of the deductee.
I do believe that, the fear of deficit of trust between the supplier and buyer must be eliminated and the environment of mutual trust and responsibility must be allowed to grow. As you know, because of few persons / business entities engaged in wrongdoing, all genuine persons / business entities are finding it difficult to do the business honestly.
Reply By KASTURI SETHI:
The Reply:
Dear Experts,
I have come across a Trade Notice issued by Central Excise Commissionerate, Chandigarh-I on the issue. It explains why responsibility is cast upon service receiver.. Copy is appended below:
A copy of Trade Notice No.10/12 dated 13-7-2012 issued by Chandigarh Commissionerate-I on the issue.
I do not know what is the present position of this trade notice.
Reply B
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
ee requests the deductor to file revised tds return by rectify the error. In GST whether such requirement of issue of Form would be there or like the system of 26AS would be there is a question mark as of now. Sir, also TDS is quarterly conplaince whereas GST would be monthly conplaince. This also will demands time of the dealer.
Sir, change is certain. It gives problem in the beginning but the fruits would be sweet. Likewise the provisions as included in the draft law would yield good result in long run. Thanks.
Reply By Ganeshan Kalyani:
The Reply:
Sir, I believe each dealers in the chain of GST should be made aware of such problems when tax is not paid by one of the party in the chain of tax credit. Thanks.
Reply By santosh phulse:
The Reply:
Sir, this is little bit complicated. How can a buyer, who has 100s of suppliers, ensure that the each of the suppliers has paid the tax collected by them into the Govt treasury??? And whether they have accounted for each transaction (incl
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
is aspect. Though there may arise teething troubles, yet GST will be successful through GSTN. Time will come when people will work from home through the System/internet. So much will be the importance of technology.
Reply By CS SANJAY MALHOTRA:
The Reply:
Dear Mr. Santosh ji,
Am in agreement with Sh. Kasturi ji. We have taken up this issue with the Board also to work out alternative so that the purpose of Govt may not be defeated. In connection with same, we were told that Govt wants us to be one of the stakeholder in ensuring compliance by taking up with our suppliers to pay tax timely, when we are reimbursing the same to them.
In sales tax, majority of states have matching concept and if balances does not reconcile, they call for Account Ledger to validate that all payments have been made by recipient of goods and accordingly allow credit.
Understand your concern which is common in Industry as resistance to change is always there. Proposal has been put across Board to review whe
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =