TaxTMI 
TaxTMI 
"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.
Input Tax Credit
04 Sep 2016 
15 Replies 
6772 Views Asked by
Input tax credit linked to supplier tax payment under draft GST law, requiring purchaser verification via system reconciliation.
The draft GST conditions input tax credit on the buyer only when the supplier has paid tax on the relevant supplies, delegating to purchasers the duty to verify supplier payment through system-driven reconciliation (such as a centralized ledger via GSTN). Proponents present this as necessary for revenue protection and to prevent misuse where suppliers collect but do not remit tax, while industry respondents flag compliance burdens for buyers-notably small and medium enterprises-and suggest technological reconciliation, contractual safeguards, and administrative or statutory remedies as mitigations. (AI Summary)
The draft GST conditions input tax credit on the buyer only when the supplier has paid tax on the relevant supplies, delegating to purchasers the duty to verify supplier payment through system-driven reconciliation (such as a centralized ledger via GSTN). Proponents present this as necessary for revenue protection and to prevent misuse where suppliers collect but do not remit tax, while industry respondents flag compliance burdens for buyers-notably small and medium enterprises-and suggest technological reconciliation, contractual safeguards, and administrative or statutory remedies as mitigations. (AI Summary)