Sub-Rule 36(4) complicates GST further: Tamilnadu Chamber

LN Revathy Coimbatore | Updated on November 20, 2019

Umpteen GST amendments, circulars and change of rules have befuddled MSMEs and small tax payers. The enforcement of a new sub-Rule 36(4) has further complicated GST procedures, according to a representative of the Tamilnadu Chamber of Commerce and Industry.

S Rethinavelu, Senior President, Tamilnadu Chamber of Commerce and Industry,said “Under the cardinal principle of Input Tax Credit, a purchaser can claim credit to the extent of GST paid on the purchase instead of adding the tax to the cost price. However, under the new sub-Rule, the purchaser cannot avail input tax credit on purchase. Such sale transaction should get reflected (auto populated) in the GSTR 2A of the seller after submission of monthly GSTR 1 (return).

If the tax amount is not reflected in the GSTR 2 of the seller or is less than the tax amount availed by the purchasing dealer, then the dealer would be able to avail credit up to a maximum of 20 per cent of such excess amount only. This restriction on availing ITC by the purchaser is arbitrary and unjustified,” said Rethinavelu.

The purchasing dealer was being punished for no fault, for even a small mistake by the seller in filing of the return could make it difficult for the purchaser to avail ITC.

Only option is to make the purchaser remit the tax directly to the government under the registered GSTN of the seller, he said, urging that the implementation of the new rule should be put off.

Published on November 20, 2019

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