Here’s how to avail GST credit if your supplier has not uploaded invoices

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Here’s how to avail GST credit if your supplier has not uploaded invoices
Unavailability of GST credit is one of the issues that plagues taxpayersIANS
  • The Goods and Services Tax (GST) regime requires the sellers to upload invoices in a timely manner to allow buyers to avail GST credit.
  • However, if the seller fails to upload an invoice or makes any error, the buyer’s GST credit gets blocked until this is rectified.
  • This can create working capital management issues, but a solution is in the works, says Tally Solutions’ Mohan D.
  • Further, there is a workaround if you want to claim GST credit in case your supplier has not uploaded invoices.
The problem of buyers not being able to avail Goods and Services Tax (GST) credit for more than one year is not unheard of. Many buyers have their Input Tax Credit (ITC) blocked or the credit lapses because their supplier has not uploaded their invoices or has not filed their GST return in time.

This results in either the working capital getting blocked or the entire ITC amount being lost.

Why am I unable to use my GST credit?



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One of the reasons behind this is that either the supplier has not uploaded the buyer’s purchase invoice on the GST portal, or has made an error while doing so, resulting in less or no ITC.

The ITC in the buyer’s account reflects as soon as the seller uploads the invoice, but in case of a delay, the buyer’s ITC cannot be availed for that particular month.

In an email interview with Business Insider, Tally Solutions’ director of product management, Mohan D said that currently the Goods and Services Tax Network (GSTN) portal does not have any mechanism to communicate with the supplier. This forces both the parties to communicate outside of the GSTN.

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Tally Solutions makes the popular accounting software Tally that is used by over 2 million small and medium businesses.

Is there a workaround that lets you avail GST credit in such cases?



According to Rule 36(4) of the Central Goods and Services Tax Rules, 2017, the buyer can avail up to 5% of the GST that has been credited to his account, in the form of provisional credit.

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Check out the following example:

S. No.ParticularsAmount
ATotal eligible ITC₹1,00,000
BEligible ITC as per GSTR-2B₹60,000
CProvisional ITC (5% of B)₹3,000
DTotal ITC for the month₹63,000
EITC not available₹37,000

The amount of ITC that is not available in this month will become available once the seller uploads the corresponding invoice(s) in their subsequent GST returns.

So, if the buyer’s GST liability is ₹80,000, they will have to pay the balance amount of ₹17,000 in cash (₹80,000 - ₹63,000). If the entire ITC was available, the buyer would not have had to pay anything in cash.

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‘Government should not deny ITC on minor technicalities’



Currently, even if there is a minor mismatch in invoices like incorrect invoice number or date, the ITC is denied to the buyer until the seller corrects the errors. Mohan says that the government should not deny ITC based on these minor technicalities.

Mohan added that GSTN is currently working on a notification system to alert the buyer and seller for reporting such mismatches. Once this system goes live, a communication mechanism between both the parties will be established, which should help reduce these mismatches.

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