Central Board of Indirect Taxes and Customs (CBIC) has
issued notifications giving effect to the recommendations made by the Goods and
Services Tax (GST) Council in the 38th meeting (refer to EY Tax Alert dated 19
December 2019).
The key
changes are:
• With effect from 1 January 2020, the
eligibility of input tax credit (ITC) in respect of invoices or debit notes not
reflecting in Form GSTR-2A shall be restricted to 10% of the matched credit.
• With effect from 11 January 2020, e-way bill
shall be blocked if the taxpayer does not file Form GSTR-1 for two tax
periods.
• Rule 86A has been inserted in Central Goods and
Services Tax Rules, 2017, empowering the Commissioner to disallow taxpayer to
debit its electronic credit ledger for discharging tax liability or for
claiming refund in certain cases.
In order to promote filing of Form GSTR-1, the
government has kept the window open until 10 January 2020 by waiving late fee
and imposing e-way bill restriction from such date. Taxpayers should make use
of this opportunity for filing pending returns and ensure compliance to
mitigate unwarranted litigations.
Vide
the new rule on credit restriction, the government aims to check the menace of
fake invoices. The businesses may need to exercise diligence by assessing the
compliance status of their vendors and rationalizing the internal processes. 
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