Reconciliation of Input Tax Credit with GSTR-2A for years 2017-18 and 2018-19 – whether mandatory or optional…..?
In the draft GST law, there was discussion about availment of Input Tax Credit (ITC) on the basis of GSTR-2. However, due to some practical and technical reasons it was never implemented. Accordingly, it was seen that taxpayers used to avail ITC on the basis of the below criteria:
♦ Receipt of valid invoice from the supplier;
♦ Receipt of goods / services; and
♦ Check whether goods / services are not covered under section 17(5) i.e. “block credit”.
Taxpayers followed this practice from July 2017 to September 2019. During this time, the Government introduced GSTR-2A and clarified that this is just a facility for the taxpayers for reconciliation of ITC, which was not mandatory as per law during this period of time. However, sub-rule (4) was inserted to Rule 36 of CGST Rules, 2017 w.e.f. 9th October 2019 wherein availment of ITC on the basis of GSTR-2A made mandatory. It is worth important to note here that this provision was inserted with prospective effect and not retrospective effect.
Source Taxguru
