GST UPDATE ON DENIAL OF SUBSTANTIAL BENEFIT FOR TECHNICAL GLITCHES
By: – Pradeep Jain
Goods and Services Tax – GST
Dated:- 30-10-2017
It has been four months since GST has been implemented but still GST network is not free from technical glitches. Not a single return utility is error-free, whether it is online or offline. This update is about the technical errors in GST network and its impact on the admissibility of ITC.
Input tax credit (ITC) is the most crucial area of any indirect tax regime. In fact, the arrival of GST was hyped by saying that there will be free flow of ITC which was lacking in the service tax and Central excise regime. On the other hand, the free flow of ITC seems to be a dream as there are number of cases where the availment of ITC is being hindered due to technical errors. Some of such cases are given as follows:-
* If any invoice is not uploaded by the supplier and mistakenly the GSTR-1 is filed. Suppose the buyer also forgets to show the inv
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actions are possible in such a case:-
* The buyer shows it in missing invoices and it is accepted by the supplier. However, once it is accepted, the tax will be again payable by the supplier on the same. This will not be acceptable to supplier as he had already paid the tax on the said invoice; only mistake was that it was wrongly shown in the "B to C" column.
* The buyer does not opts to show it in missing invoice and issues a credit note to supplier. If the supplier accepts the same, he shall have to issue a fresh invoice and it will again create a liability on him which has already been paid.
Therefore, both the options are available in this case are not practicable. In such case also, there seems the possibility that the ITC will lapse. If not, how it will be made workable by GSTN, it is not understandable.
There are a number of similar problems that the assessees are facing everyday while filing the various returns on GSTN. There seems no solution to such problems
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view of above judgment of hon'ble Supreme Court, one thing is clear that if the assessee is legally eligible for some benefit, it cannot be denied on account of some errors, even if the same has occurred at the end of assessee himself. Going by the above analogy, in the given cases also, we can say that if the assessee forgets to upload the invoice or if the invoice is uploaded but the return is not filed due to some error at the site of GSTN; it will be termed as a technical lapse only. Therefore, the analogy drawn by the Supreme Court in the case of Formica India will be equally applicable in the GST regime too and the substantial benefit of ITC cannot be denied because of these technical lapses.
Further, some civil writ petitions are being filed against the working of GSTN and errors occurring there. One such decision has been given by hon'ble Rajasthan High Court's Jaipur bench in the civil writ petition no. 15239/2017 on 5.10.2017. This writ was filed by Rajasthan Tax
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