Businesses can now claim ITC benefits for current financial year till March

The Finance Ministry has allowed businesses to claim input tax credit benefit for the first financial year of Goods and Services Tax roll out, till March 2019, provided it matches with the return filed by their suppliers. The deadline for claiming an input tax credit (ITC) ended on October 25, 2018. Tax experts said that ITC claims were allowed to businesses earlier provided businesses had generated an invoice, paid taxes and filed returns. However, in the recent order, the CBIC has mandated that ITC claims would have to be matched with GSTR-2A. GSTR-2A is auto-generated by the systems based on sales returns filed by suppliers.

The Central Board of Indirect Taxes and Customs (CBIC) through a gazette notification issued an order stating that ITC claims for the maiden year of Goods and Services Tax (GST) rollout (July 2017 to March 2018) will be allowed till March 31, 2019.

GST was rolled out from July 1, 2017. Besides, the CBIC has also allowed businesses to correct any error or omission in filing of final sales return or GSTR-1 for the period July 2017-March 2018. Now businesses can correct the errors in the returns to be filed for January-March 2019. AMRG & Associates Partner Rajat Mohan said "this relaxation would find favour with millions of taxpayers who would collectively claim a tax credit worth billions of rupees. This respite together with the recent rationalisation of tax rates is expected to mark a dent in tax collection of the next 3 months".

(With inputs from agencies.)