The Finance Ministry has said that in case the supplier does not deposit the tax due by September 30, GST taxpayers will have to return their ITC claims made in the previous financial year by November 30. In a statement, the ministry informed about this change made in the Goods and Services Tax (GST) provision. Along with this, the ministry has said that these taxpayers can claim ITC again after the tax is deposited by the supplier.

How will taxpayers get benefit?

Changes have been made in Section 37A of the Central Goods and Services Tax (CGST) Rules to give effect to this new provision. The ministry said that if a registered taxpayer has claimed input tax credit. But if the supplier has not deposited the tax due for that period by 30th September, then that input tax credit will have to be reversed by 30th November.

Rajat Mohan, senior partner, AMRG & Associates, said the change would only benefit select cases. Explaining the reason for this, Mohan said that firstly, this is a possible change, due to which no benefit will be available till the financial year 2021-22. Secondly, very few cases will be able to satisfy the conditions laid down in these rules.

On this change, Saurabh Agarwal, tax partner of EV, said that GSTR-1 will contain details of supplies made by the seller to multiple buyers. But it would be very difficult for the buyer to ascertain whether the tax has been deposited by the seller or not.

Let us tell you that GST is an indirect tax. It was implemented in 2017 to replace Variety of Previous Indirect Tax (VAT), Purchase Tax, Excise Duty and many previous indirect taxes. The registration limit for GST in India was earlier Rs 20 lakh. Now it has been increased to Rs 40 lakh. Now it is necessary for all the businesses having turnover of more than Rs.40 lakhs to get GST registration done.

To register under GST 2017, the turnover should be Rs 10 lakh for North-Eastern states including Himachal Pradesh, Uttarakhand, Jammu and Kashmir. In most states, restaurants with a revenue of more than Rs 20 lakh have to register for GST.

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