- The notification has been published in the official gazette on 09.10.2019
- It is an alert for taxpayers who have chosen not to file GSTR-9 for F.Y. 2018-19. They have to claim the accurate provisional ITC in Sep, 2019 return.
- The CBIC could clarify on the applicable return period for this rule to clear the ambiguity in the minds of taxpayers and professionals.
- A mid-year change in rules is always challenging for taxpayers.
- Businesses following manual accounting / without ERPs will have difficulty in reconciliation.
- Businesses now need to manage their accounts payables carefully since their working capital will have a direct impact with this new rule.
- Going forward, a taxpayer will be able to claim 20% of the eligible ITC.
- To arrive at the eligible ITC, a taxpayer has to deduct ineligible ITC reported in GSTR-3B from the total available ITC in GSTR-2A.
- With this new rule concerning availing provisional ITC, it becomes important for businesses to continuously follow-up with their suppliers to upload the missing invoices.
- All regular taxpayers must take up reconciliation of GSTR-2A with the purchase register more often than before.
- Any delay in reconciling will leave taxpayers missing out on their due tax credits, thus affecting their working capital cycle.
- Working capital will have a direct impact when the 20% rule gets implemented.
- Buyers will severely disadvantaged if the supplier fails to upload invoices ; hence, dependency on suppliers will increase.
- Payments will need to be made via cash despite having ITC, when suppliers fail to upload their invoices.