Businesses Request Govt for GST Clarification on Credit Notes

There are various businesses that furnish discounts, reduced costs, or extended payment cycles to clients in between the covid-19 pandemic who urge the government to define the impact of goods and services tax (GST) upon the amounts.

As per the tax experts, the companies who provide the credit notes under GST or credit memorandums that furnish to the consumers when the money has not been furnished are facing the impact of GST.

GST is furnished when the invoice or bill is provided and the businesses are now seeing it harder to avail the credit or revise the taxes that have been furnished in the former way when they do not obtain the payment via customers or pose the obtained reduced amounts.

“IGST element on the credit note issued is not treated as an input tax credit and as a corollary there is a restriction in the system to adjust IGST with CGST or SGST, the tax expert said.”

GST is divided into 3 segments such as IGST, CGST, and SGST. a portion of the tax is levied on the goods imported. CGST and SGST are major 2 elements of the tax system in which the revenue made is obtained through the central as well as state governments correspondingly.

Beneath the GST platform, the ITC is importantly a tax furnished on the raw materials or the input services. It can be practised to diminish the future GST liability.

“As there is no specific provision in the statute to provide such a restriction, the constitutional validity of this restriction may be tested as the situation is a clear example of tax cascading, which is not the objective of GST, mentioned by the tax expert.”

Firms are not able to avail GST which is furnished in the former way beneath the current GST platform despite if they do not obtain the money or pose to return it or provide the reductions to the clients.

Arpit Kulshrestha

Arpit Kulshrestha seeks higher interests in financial services, taxation, GST, I-T, etc. Writes articles with depth knowledge and is extensive for the same. The resources provide effective articles for the products of SAG infotech which provides taxation and IT software. Writing from observations and researching makes his articles virtuous.

Recent Posts

No GST Returns Will Be Accepted If Filed More Than 3 Years Past Their Due Date

An advisory has been released by the Goods and Services Tax Network (GSTN) which notifies…

14 hours ago

Delhi HC: Two Judgment Orders Against One SCN Cannot Be Accepted for the Same Period

It was cited by the Delhi HC that the two adjudication orders against one SCN…

16 hours ago

CBDT Allows Electronic Filing of Forms 3CEDA and 3C-O Via Notification No. 5/2024

The Central Board of Direct Taxes (CBDT) in an update for the taxpayers via the…

17 hours ago

October 2024 Records the 2nd Highest GST Collection, Driven by Domestic Sales

In October, Gross GST collection surged to 9% to Rs 1.87 lakh crore, the second…

19 hours ago

UP AAR: GST Will Be Levied on the Installation of Electricity Distribution Systems by DISCOMs

Goods and Services Tax (GST) is to get paid on the procurement of materials and…

2 days ago

Bombay HC Quashes Rejection Order for Voluntary GST Cancellation Due to Lack of Stated Reasons

The Bombay High Court carried that as the revocation orders for the registration cancellation on…

3 days ago