For the taxpayers who have their Input Tax Credit (ITC) rejected by the Department, section 16(4) of the CGST Act, 2017 sounds like an incubus. Taxpayers don’t comprehend the importance of the Section until they are given tax notices from the Authorities. Different Cases Impose by Government Department
Before we discuss section 16(4), let's see that it has stayed the same since the CGST Act of 2017. GST was started in 2017 and used to file monthly returns forms GSTR 1, GSTR 2, and GSTR 3 returns. But later, because of operational and legal problems, we started filing GSTR 1 and GSTR 3B. Even though the way we changed the filed returns, section 16(4) persists the same. In the past, taking ITC didn't turn on paying GST. Also, there was no rule that you couldn't file Form GSTR 2 if you had not filed GSTR 3 returns for the previous month. The Goods and Service Tax (GST) law has developed since it started, and it's different from what it was at the start. Many HCs have provided different judgments on the above matter, expressing varied views. Recent Court Orders Under Section of 16(4)
Read Also: How to Effortlessly Identify A Farzi GST Bill? New Guide Issues of Availability GST ITC Under the Section of 16(4)
It is clear from these conditions that the law regarding the biggest tax reform in indirect tax is inconsistent and confusing for taxpayers. Several cases are currently before the Supreme Court, such as Shanti Motors v. Union of India & Ors. [Special Leave Petition (Civil) Diary No(s). 4474/2024] and Mrityunjay Kumar v. The Union of India & Ors. [2024 (1) TMI 288 - SC ORDER]. It has been the Supreme Court's practice in the past to be understanding of the challenges taxpayers face and to make judgments accordingly. A circular or amendment is sought by taxpayers to simplify these issues and avoid legal battles. Conclusion: To avoid disputes over ITC availability, taxpayers should file returns on time. They should also reconcile their ITC registers promptly to prevent lapses due to non-filing or incorrect details by suppliers. Also, we propose that taxpayers reconcile their registered input tax credit (ITC) as soon as possible to keep away lapse of input tax credit due to non-filing of GST returns or suppliers who fail to disclose the right information in their GST returns.
0 Comments
Your comment will be posted after it is approved.
Leave a Reply. |
AuthorI am Amit Gupta. I like to write posts about chartered accountants' topic. |