Input Tax Credit

[santosh phulse]

'According to the existing provisions under the draft law, the buyer can claim input tax credit only if the seller or provider of the goods or services has paid the tax charged for such goods or services.This has put the onus of ensuring compliance with the customer or buyer of the goods and services.'
-This particular clause in the draft GST law seems unfair to the business community and should be removed.

AI Summary

Debate on GST Law Clause: Should Buyers Ensure Sellers' Tax Compliance for Input Credit? Balancing Burdens and Benefits. The discussion revolves around the draft GST law's clause that allows buyers to claim input tax credit only if sellers have paid the tax on goods or services. Participants express concerns that this clause unfairly burdens buyers, particularly small and medium enterprises, by making them responsible for ensuring sellers' compliance. Some argue this provision is necessary to prevent tax leakages and ensure revenue protection, comparing it to existing systems like TDS in income tax. Others suggest practical solutions, such as withholding tax payments until confirmation of deposit by suppliers, and emphasize the role of technology in facilitating compliance. There is a consensus that while the transition may be challenging, the long-term benefits of the GST system will be significant.