Input Tax Credit : Zen Tax Clinic

Input Tax Credit

Can ITC on RCM payments be denied on the grounds that a self invoice is not generated by the recipient?

Yes. As per Section 16(2)(a), registered person shall possess tax invoice in order to avail ITC. Therefore, ITC shall not be availed without the invoice

Mon, 21 Mar, 2022 at 10:20 PM

Proviso to Section 16(2) provides that payment shall be made to the supplier within 180 days. What is the effect of the provision if no consideration is to be given when the transaction is between sister concerns

Proviso to Rule 37(1) provides that consideration is deemed to be paid for Schedule I transactions for the purpose of availing ITC. Therefore, 180 days rest...

Mon, 21 Mar, 2022 at 10:16 PM

Can ITC taken on bank charges be denied on the grounds that the recipient does not possess Invoice for the same?

A specific relaxation is provided for banking companies to issue a consolidated tax invoice or any other document for the supply of service made. Therefore,...

Mon, 21 Mar, 2022 at 10:16 PM

Can ITC be denied on the grounds that the vendor has shown a different HSN in his GST return when compared to the Invoice in possession with the buyer?

Mismatch in HSN does not affect the eligibility of ITC for the buyer

Mon, 21 Mar, 2022 at 10:15 PM

Whether recovery of tax from buyer due to seller not depositing the same is tenable in law?

There is no mechanism for the buyer to find whether the supplier has actually paid tax to the Government. Therefore, if the buyer satisfies all the conditio...

Mon, 21 Mar, 2022 at 10:14 PM

ITC can be availed only on Invoices generated in GSTR2B. Does it mean that no adjustment shall be done on the ITC available in GSTR2B?

No. Certain adjustments such as removing Ineligible ITC, removing ITC for which goods has not been received in the said month, including ITC reported in ear...

Mon, 21 Mar, 2022 at 10:14 PM

Can ITC be denied on the grounds that as E-way bill is not generated for a transaction, the recipient has not received the goods thus not satisfying the ITC eligibility condition u/s 16(2)(b)

E-way bill shall be generated only when the Invoice value exceeds Rs.50,000. Therefore, it is clear that for every transaction, E-way bill need not be gener...

Mon, 21 Mar, 2022 at 10:13 PM

A recipient inadvertently pays tax on RCM for a supply for which RCM provisions are not applicable. Can he avail ITC of the same?

If the other conditions such as possession of tax invoice, receipt of goods/services etc. are satisfied as per Section 16, the ITC can be availed

Mon, 21 Mar, 2022 at 10:12 PM

A supplier who is liable to provide E-Invoice issues a normal Invoice instead of E-Invoice. Does it affect my ITC eligibility in the said transaction?

If a person who is liable to issue E-Invoice issues a normal Invoice, the invoice is invalid as per Rule 48(5). Therefore, the ITC cannot be availed

Mon, 21 Mar, 2022 at 10:12 PM