goods and service tax

Enhancements in GST Communication and ITC Claim Process for Taxpayers

Introduction

Beginning January 1, 2022, the "Communicate with Taxpayers" option under the GST login has gained significant importance for taxpayers. This feature facilitates enhanced communication and the transition of Input Tax Credit (ITC) claims.

Key Changes and Features

ITC Claim Process Update

  1. De-implementation of Rule 36(4): As of January 1, 2022, the restriction on claiming additional 105% of ITC has been lifted. Recipients can now avail ITC benefits based on the reflection of GST sales transactions in the supplier's GSTR-1 and subsequently in the recipient's GST 2B. This change by GSTN is a significant move towards streamlining the ITC transfer process.

Notifications and Communication

  1. Recipient Notifications: Taxpayers may receive notifications on their registered mobile number and email ID regarding requests made by suppliers.

  2. Requesting Filing of GSTR-1: The new feature allows recipients to request suppliers to file their GSTR-1 forms to claim ITC benefits effectively.

  3. Timely Action Required: Suppliers are encouraged to act promptly upon receiving these notifications and file their GSTR-1 by the deadlines of the 11th or 13th of the following month. This is crucial, especially since the presumptive additional ITC of 5% was curtailed from January 1, 2022.

Responsibilities and Implications

  1. Responsibility on Suppliers: This initiative places a responsibility on suppliers, as failure to submit GSTR-1 or Invoice Furnishing Facility (IFF) by the due date could have implications for the recipient's ability to claim ITC.

  2. Evidence of Non-Compliance: If a supplier does not file GSTR returns despite notifications, the recipient may utilize the notification details as evidence of the supplier's non-compliance.

  3. Withholding GST Payments: Recipients are entitled to withhold GST payments corresponding to the GST charged if suppliers fail to file their returns. This provision strengthens the recipient's position regarding tax liability.

  4. Conditional Release of GST Amount: Recipients may only release GST amounts once the respective transactions are reflected in their GST 2B.

Additional Features

  1. Credit and Debit Notes: The option to request credit notes and debit notes is also available for both suppliers and recipients, ensuring smooth transactional adjustments.

Conclusion

The introduction of these features marks a progressive step in GST compliance, facilitating better communication and accountability among taxpayers.