Is your GST invoice having required particulars for availing Input tax credit?

It is now about more than 2 years after implementation of GST in India. GST has been implemented from 1.07.2017. GST has its own flaws and glitches which are still faced by taxpayers and consultants. However government is trying their best to overcome the glitches faced in Goods and Service Tax Network.

This is about the authenticity of the invoice which a registered taxable person possesses for claiming input tax credit (ITC). The provisions and conditions for claiming ITC are governed by section 16 of the CGST Act. One of the conditions under section 16(2) of the act states that a registered taxable person shall have in its possession a tax invoice, debit note or such other tax paying documents as may be prescribed for obtaining ITC. Many people don’teven know that for claiming ITC, requirements of rule 36 shall be fulfilled. Rule 36 deals with the documentary requirements and conditions for claiming input tax credit.

First of all we need to understand what is Input Tax Credit? Input tax credit is defined under section 2(62) of the CGST Act, 2017. In very simple words Input Tax Credit means the tax paid by the customer/buyer on the purchase of goods and services. It also includes any gst paid on import of goods and taxes paid under reverse charge mechanism. However it specifically excludes any taxes paid under composition levy.

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There are certain requirements as to issue of tax invoice, debit note, credit note, ISD Invoice etc which are specified under rule 46 to 55 of CGST Rules, 2017. Such rules prescribe many particulars that should form part of invoice. Due to these requirements registered taxable persons were facing difficulties in obtaining ITC as most of the time such invoices does not fulfill the criteria as to required particulars governed under such rules.

Considering the practical position prevailing, Rule 36 has been amended to provide that ITC shall be admissible even if certain particulars are missing in invoice if otherwise it is containing specific substantial particular. As a matter of great relaxation, for taking ITC, all the particulars as required to be mentioned in invoice/debit note/ISD Invoice etc. as per rule 46 to 55 of CGST Rules, 2017 are not necessary. A proviso has been inserted to Rule 36(2) vide N/N 39/2018-CT issued dated 04.09.2018. ITC can be taken as long as six important particulars are mentioned therein in the documents.

1) The details of the amount of tax charged

2) Description of goods or services

3) Total value of supply of goods or services or both

4) GSTIN of the supplier

5) GSTIN of the recipient and

6)Place of supply in case of inter-state supply

It is a much needed relief provided to registered taxable person wherein they are admissible to obtain ITC if their invoice or other tax paying document contains only these 6 important particulars mentioned above.

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In conclusion, despite the flaws and glitches faced in the implementation of GST, the government is making efforts to overcome the challenges. The recent amendment to Rule 36 provides relief to registered taxable persons by allowing input tax credit even if certain particulars are missing in the invoice. As long as the document contains the six important particulars, taxpayers can claim ITC, providing much-needed flexibility and ease of compliance.

"Stay compliant and claim input tax credit effortlessly with our expert guidance. Consult us today at info@manishanilgupta.com to ensure your invoices meet the necessary requirements for seamless ITC claiming."

Disclaimer: The information given above is to provide general guidance to the readers. This information should not be sought as a substitute for legal opinion