Input tax credit (ITC) is backbone of GST as it ensures the critical feature of taxing on value addition in the supply chain. Any action of denying ITC would lead to Cascading effect and kills the soul of GST. Hence, the success of GST heavily depends on the free flow of ITC across the supply chain.
The GST law was also largely ensuring this feature to be in place. However, there are some provisions that may impair this feature. Among others, invoice matching to avail ITC i.e. ITC is said to be allowed only when the supplier uploads the invoice containing the GSTIN & other details of the recipient & pays the GST thereon to the Government. The last 4 year’s experience has shown the various trajectories in following the said requirement and technical glitches for the Government to implement in its full force albeit the Government was very keen on imposing the same knowing very well that such requirement causes undue hardship to the Taxpayers.
In this article, an attempt is made to analyse the relevant provisions, its legality and the jurisprudence relating to ITC matching.
Source Taxguru
