The Debit Notes Saga: Tranquility Alas!
NITYA Tax Associates is proud to present their recent write-up in the ‘Article’ series on trending Indirect Tax issues. A gist of the next article in the series is as under:
Article 79 – “The Debit Notes Saga: Tranquility Alas!”
Section 16(4) of the CGST Act prescribes time limit for availing ITC. This section was amended vide Finance Act, 2020 (effective January 1, 2021) to remove linkage of Debit Notes with Original Invoices for computing time limit to avail ITC on Debit Notes. The Gujarat Authority for Advance Ruling in the case of I-Tech Plast India [2021-VIL-205-AAR] held contrary to legislative intent and led to the issuance of Circular No. 160/16/2021-GST dated September 20, 2021. The Circular rightly clarified that relevant date for availing ITC on Debit Notes shall be determined based on the date of issuance of the Debit Note and there is no requirement to link the Debit Note to the Original Invoice. However, the Circular appears to have wrongly stretched the benefit of amended Section 16(4) to dead claims.
Through this article, Our Partner, Mr. Dharnendra Kumar Rana, Senior Associate, Ms. Parul Gupta and Associate, Mr. Mohit Pugalia have examined the Circular in detail and tried sharing their analysis through this piece of writing.
Please click on the below link to read our latest article titled “The Debit Notes Saga: Tranquility Alas!”.