GST

Guidelines  regarding circumstances  in which ITC has to be blocked /unblocked from Electronic credit ledger

Guidelines  regarding circumstances  in which Input Tax Credit has to be blocked /unblocked from Electronic credit ledger

On the subject captioned above, it is intimated that GSTN has recently released API for application of the functionality for blocking and unblocking of Input Tax Credit by the statutory authorities on the GST common portal.  The system  Integrator  of  the  Department  has  developed   the . necessary  back end application for blocking and unblocking Input Tax Credit for the Electronic credit ledger taxpayers . The application has already been launched State wide.

The functionality of blocking and unblocking Input Tax Credit is an important tool for safeguarding the Government revenue particularly in cases of fraudulent activities by the taxpayers.

Excise and Taxation Commissioner (GST), Haryana, Punchkula has issued a circular directing the jurisdictional officers to use this functionality  for  blocking/unblocking  Input  Tax  Credit  under  the  following situations:-

(i)  Full amount. of credit available in the Eletctronic Credit Ledger of the taxpayer should be blocked instantly in cases where the registered  taxpayers are found to be bogus/fake as a result of any investigation or intelligence . Such taxpayers are not entitled for the credit on the grounds that no supply has been made and the proper tax has also not been  deposited  in respect  of the claimed

(ii) Full amount of credit should also be blocked in cases where the firms have been found non-functional.  Such taxpayers are also not entitled for the credit as no supply has been received for the reason that the firms are non-functional.

(iii) Credit should also be blocked in respect of those registered taxpayers who have claimed transitional credit through TRAN- 1/TRAN-II in excess of their lawful entitlement. The credit should be blocked only to the extent of excess credit claimed by the taxpayers over and above their entitlement as per GST law.

(iv) The registered taxpayers are not entitled for credit availed of by them accruing from receipt of supplies which have not been used in the course of business or furtherance of the business. If in pursuance of examination of returns , such cases are detected, the credit should be blocked. The credit in these cases shall be blocked only to the ·extent of amount of inadmissible credit.

(v) The registered taxpayers are not entitled for credit availed of by them accruing from receipt of supplies where the credit is not admissible in accordance with Section 17(5) of the GST la If in pursuance of examination of returns or otherwise, such cases are detected , the credit should be blocked . The credit in these cases shall be blocked only to the extent of amount of inadmissible credit.

(vi) The Credit should be blocked in all such cases where the taxpayers are . not entitled for the credit in accordance with various provisions of the law e. if the tax on supplies has not been paid by the supplier, or the recipient is not in possession of the tax invoice, or the supply is outdated , or the supplier is composition taxpayer etc. The credit in these cases shall be blocked only to the extent of amount of inadmissible credit.

Download Circular Click Here >>

Share

Recent Posts

  • Income Tax

AO not justified in rejecting registered valuer’s report without reference to DVO – ITAT

AO not justified in rejecting registered valuer’s report without making a reference to the DVO - ITAT In a recent…

4 days ago
  • FCRA

FCRA specifies list of 105 purposes to be selected for which registration is applied

FCRA specifies list of purposes to be selected for which registration is applied.  The Ministry of Home Affairs has notified…

1 week ago
  • Income Tax

Withholding tax u/s 40(a)(i) not required on cost-to-cost reimbursement made to parent company

Assessee was not liable to withhold tax at source u/s 40(a)(i) on cost-to-cost reimbursement made to parent company In a…

1 week ago
  • Government

Temporarily blocking public access to Telegram App not disproportionate – Delhi High Court

Temporarily blocking public access to Telegram App under section 69A of IT Act 2000 is not disproportionate - Delhi HC…

1 week ago
  • Income Tax

High Court explains the meaning of term ‘enterprise’ appearing in section 80IA

High Court explains the meaning of term ‘enterprise’ appearing in section 80IA to means a project or an undertaking owned…

1 week ago
  • Income Tax

Addition deleted as assessee was only a carrier of cash not owner who came up to own it

Addition deleted as assessee was only a carrier of cash and the real owner had come forward owning the cash…

2 weeks ago