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2019 (5) TMI 701 - AAR - GSTInput tax credit - Restriction u/s 16(2) where consideration is not paid within 6 months - consideration for inward supplies paid through book adjustment - reversal of credit - Sections 16 and 49 of the GST Act - transactions where the payment had not been made by account payee cheque or account payee draft or through electronic banking clearance - HELD THAT:- In the present context, ‘consideration’, as defined under section 2(31), provides the scope and ambit for modes of payment. It includes, in relation to the supply of goods or services, any payment, made or to be made, whether in money or otherwise, and also the monetary value of any act or forbearance. This definition of ‘consideration’ cast the net so wide that almost no form of payment is excluded. The recipient can pay the supplier consideration by way of setting off book debt. Unless the law specifically restricts the recipient from claiming the input tax credit when consideration is paid through book adjustment, credit of input tax cannot be denied on this ground alone. Rule 19(8) of the West Bengal Value Added Tax Rules, 2005, specifically provided that credit of input tax would be available only if the payment was made by account payee cheque or account payee draft or through electronic banking clearance when such payment exceeded rupees twenty thousand in a day. No such restriction is apparently provided under the GST Act. The Applicant can pay the consideration for inward supplies by way of setting off book debt. The GST Act and rules made there under does not restrict the recipient from claiming the input tax credit when consideration is paid through book adjustment, subject to the conditions and restrictions as may be prescribed and in the manner specified in Sections 16 and 49 of the GST Act.
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