GSTN enables the facility to check if the tax has been paid by the seller or not for claiming ITC

A New Facility has been made available by Goods and Service Tax Network (GSTN) on GST Portal. As per the New Facility, now you can check if the Registered person has paid his Tax Liability of what he has disclosed in GSTR-1 or Not.

As per conditions for claiming Input Tax Credit (ITC) provided in Section 16, one of the conditions for eligibility of taking ITC was that Tax Liability should have been paid by the Seller of goods. As of now, the recipient had no mechanism available on GST Portal to check that. With this new facility, the mechanism has now been made available to the recipient of Goods/Service claiming Input Tax Credit.

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How to Access the Facility?

• Login to your GST ID
• Go to Search Tax Payer Tab
• Enter the GSTN you need to search for.
• You will see a Liability Paid Percentage Tab where % of Liability paid represents a quantum of liability auto-populated from GSTR-1 that was declared/paid in GSTR-3B.

Is there any Drawback of this Facility?

As of now, we need to follow the above-mentioned process for each and every GST Number. This would be a difficult process especially if you have a large number of vendors. The process for checking each and every vendor before filing a return is thus time taking.

Also now the responsibility of checking if the Tax Liability is paid by vendor is now shifted to the person taking ITC in true sense as now we cannot say that “We did not have the mechanism”.

What is the Liability paid percentage Calculation methodology?

Liability paid percentage = (Liability paid / Liability auto-drafted) *100

Liability paid: This is the sum of the total liability (Other than reverse charge and reverse charge) paid by the taxpayer in Form GSTR-3B for a particular period.

This also includes the amount paid by the taxpayer for any period in Form DRC-03 by selecting the ‘Cause of payment’ as Liability mismatch – GSTR-1 to GSTR-3B.

Liability Auto-drafted: This is the sum of total liability which is auto-drafted in Form GSTR-3B for a particular period from GSTR-1/IFF and GSTR-2B.

For taxpayers opting to file return on monthly frequency, the liability paid percentage is computed for each period and for taxpayer opting to file return on quarterly frequency, the liability paid percentage is computed for the quarter.

Note:

• In case, liability auto drafted is Zero, then ‘-‘ is displayed
• In case, liability paid is Zero, then ‘0’ is displayed
• In case both liabilities paid, and liability auto drafted are Zero, then ‘0’ is displayed
• In case either the liability paid, or liability auto drafted is negative then:
• In case liability paid is equal to or more than the liability auto drafted then ‘100’ is displayed
• In case liability paid is less than the liability auto drafted then ‘0’ is displayed
• In case the liability paid percentage is less than 100, then the value is highlighted in red.