“𝘐 𝘩𝘢𝘷𝘦 𝘱𝘢𝘪𝘥 𝘮𝘺 𝘴𝘶𝘱𝘱𝘭𝘪𝘦𝘳. 𝘐 𝘩𝘢𝘷𝘦 𝘱𝘢𝘪𝘥 𝘵𝘩𝘦 𝘎𝘚𝘛.”
Why should my#InputTaxCredit depend on what happens after that?
This has perhaps been one of the most frequently debated questions under the #GSTregime.
The issue has never been straightforward ❌
On one side lies the Government’s responsibility to safeguard revenue and curb fraudulent #ITC claims. On the other lies the genuine #purchaser, who may have discharged the #invoice value, including GST, but has little visibility into whether the #supplier ultimately remits that #tax to the #Government.
The CHALLENGE has always been finding the “Right Balance” ⚖️
It appears that the GST Council’s Law Committee has attempted to address this very issue. The reported proposal seeks to protect a buyer’s ITC where prescribed conditions are satisfied, while enabling the #TaxAuthorities to recover the dues from the defaulting #supplier.
If approved, it would reinforce an IMPORTANT PRINCIPLE:
“𝘊𝘰𝘮𝘱𝘭𝘪𝘢𝘯𝘤𝘦 𝘴𝘩𝘰𝘶𝘭𝘥 𝘣𝘦 𝘦𝘯𝘧𝘰𝘳𝘤𝘦𝘥 𝘸𝘩𝘦𝘳𝘦 𝘵𝘩𝘦 𝘥𝘦𝘧𝘢𝘶𝘭𝘵 𝘰𝘤𝘤𝘶𝘳𝘴.”
At the same time, this proposal does not dilute the need for commercial prudence.
#Vendor due diligence,
payment through #BankingChannels,
proper #documentation,
and robust #compliance processes will continue to remain “ESSENTIAL”.
A WORD OF CAUTION ⚠️
This is only a recommendation of the #LawCommittee.
The existing legal position continues to apply until the #GSTCouncil approves the proposal and the necessary hashtag#StatutoryAmendments are notified.
Every mature #TaxSystem evolves…
Perhaps this is another step towards balancing revenue protection with certainty for compliant hashtag#Taxpayers!!
Let us wait for the GST Council’s decision.
