Input leakage

 

For any enterprise, GST input credit is an equivalent to cash. Thus, it’s important  for every enterprise to claim correct amount of GST input credit. However, it has been observed that due to complexity in law, the enterprises are losing their genuine GST input. Given below few such instances.

·         Invoices of last financial year should be booked before September of next financial year and claim Input credit before September of next financial year. If enterprise missed to that then it’s not possible to claim input credit for old invoices and there will be a loss of input credit.

 

·         There are instances, where vendor upload the invoices of last financial year in next financial  year after September. In such  case also, enterprise will lose benefit of input credit.

 

·         Enterprises are required to pay GST under reverse charge and there are instances where IGST had been paid in place of CGST & SGST and vice versa. Please note that law does not permit  inter-head payments and accordingly enterprise cannot claim input credit of GST paid  under wrong head and also require to pay  GST under correct head with interest

 

·         Sometimes, the GST invoice of one branch being booked in another branch. Please note that law does not allow to claim GST input credit in different branch of the same enterprise and same leads to loss of GST input credit. 

Hence, enterprise can be more cautioned while doing their accounting and reduce the quantum of loss of GST input credit.  Also , government should note the hardship caused to enterprise and relax the norms by making necessary changes in law.