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In this article, we will discuss about section 43A in detail.
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1st February 2022
Budget 2022 updates-
1. ITC cannot be claimed if it is restricted in GSTR-2B available under Section 38.
2. Time limit to claim ITC on invoices or debit notes of a financial year is revised to earlier of two dates. Firstly, 30th November of the following year or secondly, the date of filing annual returns.
3. Section 38 is completely revamped as ‘Communication of details of inward supplies and input tax credit’ in line with the Form GSTR-2B. It lays down the manner, time, conditions and restrictions for ITC claims and has removed the two-way communication process in GST return filing on the suspended return in Form GSTR-2. It also states that taxpayers will be provided information of eligible and ineligible ITC for claims.
4. Section 41 is also revamped to remove the references to provisional ITC claims and prescribes self-assessed ITC claims with conditions.
5. Sections 42, 43 and 43A on provisional ITC claim process, matching and reversal are eliminated.
29th December 2021
CGST Rule 36(4) is amended to remove 5% additional ITC over and above ITC appearing in GSTR-2B. From 1st January 2022, businesses can avail ITC only if it is reported by the supplier in GSTR-1/ IFF and it appears in their GSTR-2B.
21st December 2021
From 1st January 2022, ITC claims will be allowed only if it appears in GSTR-2B. So, the taxpayers can no longer claim 5% provisional ITC under the CGST Rule 36(4) and ensure every ITC value claimed was reflected in GSTR-2B.
Section 43A has been added to the Central Goods and Services Tax Act, 2019 (CGST Act). This section deals with the procedure for furnishing returns and availing input tax credit.
There have been various changes in the GST return reporting framework since the introduction of GST. The intent of inserting this section is to merely operationalise the changes in the return reporting framework as and when the same is introduced by the CGST Rules. The GST Council in its 27th meeting had proposed this simplified return filing structure for taxpayers.
Under the proposed new scheme that later got suspended, every registered taxpayer would have to file only one monthly return. The facility to upload invoices on a real-time basis will be made available. Suppliers can upload invoices anytime during the month before a cut-off and the invoices would be visible to buyers.
The buyers will be eligible to claim the credit on a self-declaration basis even if the supplier hasn’t uploaded all invoices during the interim period of transition. The new GST return scheme aims to simplify the return filing procedure to a great extent.
Section 43A is important and much-needed relief to taxpayers and will reduce the concerns of the industry to a great extent. However, note that it is not notified and hence currently not applicable.
Taxpayers must claim ITC in their GSTR-3B only to the extent of the amount appearing in their GSTR-2B/GSTR-2A. This has been outlined in the provision of Section 16(2)(aa) of the CGST Act with effect from 1st January 2022. Until then, taxpayers could claim 5% additional ITC along with ITC appearing in GSTR-2B while filing GSTR-3B.