As per the GST law, an invoice needs to be uploaded for every transaction so that the transaction qualifies for an Input Tax Credit (ITC) benefit. As per the new government regulation, firms will not be able to make ITC claims if their vendors have not uploaded their invoices on the GST online portal. With this new regulation, the working capital of firms might get stuck in the form of unsettled ITC claims.
Companies have voiced their concerns with regards to this new regulation. Firms have said that since the new rule does not mention about the specific time period for this calculation, it will lead to a lot of stress on the companies since they might end up losing on their ITC benefit because their vendors have failed to upload the invoices.
Financial experts believe that with this rule, it becomes crucial for all companies to implement a mechanism wherein invoice uploads can be tracked on a real-time basis so that follow-ups can be sent to vendors on a timely basis.
Tax experts have also said that this new rule is a unilateral amendment because credit is limited based on the invoices uploaded by the supplier. Taxpayers cannot change or add details which a supplier has failed to report. Many companies are of the opinion that they might not be able to reconcile their statements on time since their vendors haven’t uploaded their invoices yet.
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Bhavana is a Senior Content Writer handling the GST vertical. She is committed, professional, and has a flair for writing. When away from work, she enjoys watching movies and playing with her son. One thing she can’t resist is SHOPPING! Her favourite quote is: “Luck is what happens when preparation meets opportunity”.