Rigmarole of Input Tax Credit under GST

Aanchal Kapoor – [2022] 134 taxmann.com 109 (Article)

“Input Tax Credit”, the basis for bringing up India’s biggest Indirect Tax Reform to eliminate cascading effect of taxes and promote Seamless Credit, has become Rigmarole in light of multiple hurdles to break the free flow of Credit in the Tax Chain and Input Tax Credit seems to be lost ball in the weeds in form of:

a. Litmus test of Section 16,

b. Section 16(4) time limits,

c. Mischievous Rule 36(4),

d. Mysterious GSTR 2A/2B,

e. Blocking of credit as per Section 17(5),

f. Rule 86A(Blockage of Credit),

g. Rule 86B(1% Cash payment),

h. Reversals owing to 180 days condition,

i. Reversals pertaining to Rule 42/43,

j. ITC restrictions through Rate Notifications,

k. Broken limbs in form of GSTR 2 in absentia,

l. GSTR3B as proxy to GSTR 3,

In this article, the author has analysed several issues, legal position and the risks involved in availment of ITC in GST regime w.r.t Sec 16(2)(c) in light of Rule 36(4) & amendment relating to Section 16(2)(aa) and Section 16(4) Time Limits.

Click Here To Read The Full Article