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.
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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.
Author Bio
Government want to withdraw ITC in all respects. I think Government wrongly impose ITC sections in GST and wanted to stop ITC in anyway. How to survive small businesses who are uploading gstr1 quarterly also doing business by bank loan. FM to rethink section 16(2)(aa) in this case no one get ITC who purchased goods from quarterlywala as a result they are waiting for atleast 2 months. How to continue small businesses although 70% business going down due to COVID pandemic .
Government doing so many injustice one by one. I. T portal made by Govt.but not working properly, no due date extention and Govt. Made a law in gst if you but anything as a registered dealer you will get ITC whether your gstr1 monthly or quarterly does not matter, now implement dangerous sections like 16(2)(aa).
Just like a DADAGIRI, Govt. Is a sadhu and all business men’s are chor. FM is not understanding the GST law as well as finance. I requesting to please apply your intellect don’t follow the intellect of others. Ofcourse you are the FM.
my dear you are exception.also yr clients ara smart one!.you have to see clients from village s. many problems we are facing. you are filing 60 returns is not a qualification to support the amendmets. you haveto follow the masses
This is absolutely fine if government imposes some restrictions to keep away defaulters from the tax system. This is actually not on genuine tax payers.
Government has given option to file GSTR1 monthly for all and if the same is filed within the due date then there is no dispute at any end. Government can’t look up on every transaction so at the end of retail it could be handled. If seller is not filling his return monthly and on time then buyers will stop transactions from such defaulters and in coming days there would not be such kind of defaults in the tax system.
Either seller should opt monthly filing or If seller opted quarterly filing then we can uphold payment on tax part.
We should accept the fact that the government system can’t run without revenue and specially when we want to be a powerful country by managing our infrastructure, technologies, security, job opportunities, education, medical system etc. very well. And specially to manage freebies to those people who actually not the right recipient.
Govt. is very much concerned about it’s revenue collection and it has every right to do so but doing so at the cost of genuine buyers is simply ridiculous. Now the vital question is who is genuine or not genuine. The responsibility of identifying and penalizing the wrong doers is of the Govt. and it must not be shifted to the buyers. Govt. is very well capable to deal with them provided it has real intent. But the message today is ” You (Govt) can not or do not want to catch the wrong person so you are catching the right person. ” Because it is comfortable for you.
Again, if any taxation system is attracting more n more wrong persons it means there is a big hole in the taxation system.
Govt. should rethink, review and reverse the taxation system for the sake of itself and for the sake of business community and others with out making it a prestige issue.
yes thats what logic of 16(2)(aa) but we have to see from our clients perspective too
Purchaser should allow to take credit in same month and if seller not shown it on next month gstr1 then purchaser has to do reversal of credit in next month and should pay with interest
BJP GOVT MUST STOP POLITICAL CORRUPTION WHICH IS EATING AWAY ALL RESOURCES OF COUNTRY AND PEOPLE WILL REMAIN POOR & BACKWARD IN FUTURE WHILE POLITICIANS ARE GETTING RICHER & RICHER DAY BY DAY. BJP MUST REMEMBER ITS COMMITMENT MADE BY MODI BEFORE 2014 LOK SABHA ELECTIONS TO STOP CORRUPTION WHICH IS STILL NOT FULFILLED SO FAR WHICH WILL FORCE VOTERS TO DEFEAT BJP AT ALL COSTS. NONE OF POLITICAL PARTIES IS SINCERE & HONEST TO STOP CORRUPTION AS ALL ARE BENEFICIARY OF CORRUPTION. SO ALL SUCH PARTIES MUST BE PUNISHED BY VOTERS.
There seems to be no action is taken against the suppliers who default in uploading the invoices in GSTR 1 rather punishing the genuine customers who pay tax regularly!
very well said. the govt must responsible to indetify wronng doers instead they panellised the right ones.
Three reasons for not filing GSTR1 shown by you are not logical. Why any one will wait for last minute filing. If one has plan to file and he is serious nothing can stop him to complete within time.
I am filing 64 return every month since July 2017 and found not a single delay.
One pofessional messeaged me on 9-9-2021 that
“This is best decision , Goverment cannot fund your excess ITC . Govt should have all rights because Its abt their revenue .. They must prohibit any claim of ITC not supported by GSTR 2B.. Identifying deafulters is respobilty of every taxpayer and Taxpaper should do business with only those who are genuine . I am filling GSTR 1 of my 60 clients. Never one day delay of filling. . Why you are opposing this section 16(2)(aa)? ”
I did not responded it .
He again called me on 12-9-21, saying that ” Sir I got sick on 9th .. Could not filed GSTR 1 for my 60 clients before 11th….. I got thousands of calls from Counter parties of My 60 clients asking why They are not able to see ITC of August month in thier GSTR 2B. He agreed that Practcally anythimng is possible which might be reason of non -filling GSTR 1 ”
REAL LIFE DIFFICULTIES ARE NEVER MENTIONED IN THERIOTICAL LAWS & THEORIES..
You are very unhappy person in your personal life, I can predict
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Good article. jai ho Modi Sarkar