Rule 36(4) of CGST Rules, 2017
Rule 36(4) of CGST Rules, 2017 is inserted to curb ITC. The scam of ITC by many suppliers was the main reason behind it. But there are many practical issues related to it’s implementation. Let us have a look on them. A PIL is filed against Rule 36(4) of CGST Rules. Many cases in high court are also pending on date.
a. GSTR 2A gets updated on real time basis upon filing of return by the supplier
b. Reconciliation Statement prepared by the Registered Person gets redundant once the GSTR 2A gets updated
c. Invoices Uploaded by the suppliers can be amended on Real Time basis. Hence the invoice amount gets updated and the credit amounts will also be updated.
d. Invoices uploaded can be amended to value as zero
e. Upon receipt of Notice from Adjudicating Authority, the it would be very difficult for Registered Person his reconciliation in case where the invoice amount is reduced or amended to zero.
f. At the time of claiming of credit, GSTR 2A reconciliation to be drawn for the current month and also preceding months which is an impracticable act.
g. Reconciliation Statements goes on increasing every month, as the Reconciliation Statements has to be prepared for earlier months also.
h. No time limit has been prescribed for downloading GSTR 2A from GST Portal
i. Supplier at times report the Invoices under B to C instead of B to B in GSTR 1. As a result Invoice may not reflect in GSTR 2A and registered person has been made liable to suffer for the acts of the supplier.
j. Supplier may file the returns beyond the due date as prescribed for GSTR 1. Hence registered person has been made liable to suffer for the acts of the supplier.
k. Registered Person has been made liable to pass on the credit to the customer, however registered person is not able to avail the credit.
l. Restriction on availment of credit has created a Working Capital Gap.
m. Input Tax Credit getting accumulated in Books of Accounts which remains unclaimed for the multiple month.
n. There will always be difference in Input Tax as per Books of Accounts and Input Tax Credit claimed in GSTR 3B. Thus reconciliation to be prepared and kept in records.
Related Topic:
PIL filled in Supreme Court – Rule 36(4)
