Unsettled Section 16(4)—CA. Akash Phophalia

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The Tax Publishers GST--Input Tax Credit Unsettled Section 16(4) CA. Akash Phophalia The learned author aims at discussing implication of limitation of taking input tax credit as provided under sub-section (4) of Section 16 and implication of recent judicial decisions. 1. Introduction Seamless flow of input tax credit was the core objective behind introducing GST, but as GST law is settling down, this agenda had been shifted to curtailment of input tax credit by hooks or crooks. Provision of section 16(4) was enshrined to provide maximum time limit to avail input tax credit against any invoice. But this provision was implemented when the mechanism to file returns was uploading of GSTR-1, GSTR-2 and GSTR-3. However, this process of filing of return was changed leaving provisions of section 16(4) unchanged and this had resulted in chaos throughout the country. In this article, the author wishes to throw light on the recent development took place for 16(4) in different courts. 2. Genesis of Chaos The provisions of section 16(4) are under challenge due to introduction of amnesty scheme, whereby belated filing of GSTR-3B was allowed after invocation of cancelled registrations. Such filing of GSTR-3B with the availment of ITC was not restricted at the time of filing. As a result of belated filing of GSTR-3B and claim of ITC through GSTR-3B, the provisions of section 16(4) were hit and the whole chaos begun. SUBSCRIBE FOR FULL CONTENT

The Tax Publishers

GST--Input Tax Credit

Unsettled Section 16(4)

CA. Akash Phophalia

The learned author aims at discussing implication of limitation of taking input tax credit as provided under sub-section (4) of Section 16 and implication of recent judicial decisions.

1. Introduction

Seamless flow of input tax credit was the core objective behind introducing GST, but as GST law is settling down, this agenda had been shifted to curtailment of input tax credit by hooks or crooks. Provision of section 16(4) was enshrined to provide maximum time limit to avail input tax credit against any invoice. But this provision was implemented when the mechanism to file returns was uploading of GSTR-1, GSTR-2 and GSTR-3. However, this process of filing of return was changed leaving provisions of section 16(4) unchanged and this had resulted in chaos throughout the country. In this article, the author wishes to throw light on the recent development took place for 16(4) in different courts.

2. Genesis of Chaos

The provisions of section 16(4) are under challenge due to introduction of amnesty scheme, whereby belated filing of GSTR-3B was allowed after invocation of cancelled registrations. Such filing of GSTR-3B with the availment of ITC was not restricted at the time of filing. As a result of belated filing of GSTR-3B and claim of ITC through GSTR-3B, the provisions of section 16(4) were hit and the whole chaos begun.