New GST rule on ITC Reversal may affect business: Kerala GST Practitioners Association:

New GST rule on ITC Reversal may affect business: Kerala GST Practitioners Association Kerala GST Practitioners Association said on Wednesday, that the reversal of input tax credit (ITC) due to Rule 37A will negatively impact businesses because it shifts the weight of tax duty to the customer if the seller does not pay the tax. In other words, if the supplier fails to pay the tax on time, the buyer must pay the tax and interest on his behalf. The GST law requires that the selling company file the GST return reflecting tax as per the bill provided. However, under the newly adopted rule, if the supplier who made the sale files only GSTR 1 including information about the bills for the particular month, the buying firm must ensure that GSTR 3B, which is a continuation of GSTR-1, is filed within the time limit. Otherwise, the input tax credit (ITC) reflected on the bill should be given to the department, as well as interest. According to a GST expert, Santosh Jacob, When there are severe requirements in the GST system to take the tax earned from the person who made the transaction, the burden is doubled on the buyer's shoulders, and he would be in trouble. According to newly proposed regulation 37A, if there are any errors in the tax filings for the financial year 2022-23, they must be addressed before November 30, 2023, and the portion of ITC must be reversed. Otherwise, the buyer will be required to pay the additional tax plus interest, he added.