Section 16(2)(aa) of CGST Act, 2017 was inserted vide Section 109 of Finance Act, 2021 applicability of which is yet to be notified. Extract of Proposed Section Section 16(2)(aa) of CGST Act, 2017 is as follows:-
(aa) the details of the invoice or debit note referred to in clause (a) has been furnished by the supplier in the statement of outward supplies and such details have been communicated to the recipient of such invoice or debit note in the manner specified under section 37;
Section 16(2)(aa) says that ITC will be available only when Supplier has furnished the details in his GSTR -1.
16(2)(aa) is the end of all hopes for any simplifications we ever demanded in GST. In addition to that, This is injustice to Taxpayers.
I repeat , It is putting Condition which is beyond our own control.
Because its Impossible that my 100% purchases will be reflected in Same month every time every month.
My question is “Why I am at loss of ITC in the current month if my Supplier did not file GSTR 1?”
16(2)(aa) will prove fatal for many whose ITC not appearing in GSTR 2B and they might have to take up High interest Loan.
This Section might kill many business or put many in big financial crunch Because he has to squeeze up his working capital to pay GST for ITC not appearing.
And We have to see Supplier’s situation who could not uploaded his GSTR-1 for thousand of reason which might happen in REAL life
1. he / his consultant might be sick or It is Saturday / Sunday or some holidays Because of which , he could not upload GSTR1
2. his has been blocked by system to upload GSTR -1 Because previous 3B pending
3. SITE NOT WORKING ON 10TH / 11TH & supplier could not upload his GSTR-1
there could be thousands reasons
Even if I am very Perfect on time filling in my return , It is not possible for me to ensure that my all Suppliers are filling on-time.
Its impossible that One can filter good suppliers & defaulter Supplier & once Section 16(2)(aa) become applicable, People will stop business with supplier who defaulted in filing of GSTR -1 even once.
Author request Honorable Finance Minister of India and GST Council to have a Rethink on applicability of provisions of this section.