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Reconciliation of ITC with GSTR-2A for 2017-18 & 2018-19 – mandatory?

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

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