Infosys co-founder and now non-executive chairman Nandan Nilekani suggested a method to the Goods and Services Tax (GST) Council on Thursday, January 18, to resolve the input tax credit claims woes under GST, reported Business Standard.
A senior government official told the business daily that Nilekani said in his presentation: "...The onus of matching invoices will fall on the supplier and buyer rather than on the GSTN. This will be a much simpler process. There will be no filing of returns, but only uploading of invoices."
If Nilekani's recommendation is implemented, taxpayers will soon have to match invoices to claim input tax credit. Invoice-matching is currently automated through the GST Network (GSTN).
According to the high-profile technocrat's suggestion, it is the seller who should upload the invoice to the network and the buyer will acknowledge it.
Input tax credit claims came to focus after the government failed to collect the targeted amount of revenue through GST, mostly due to tax evasion.
GST collection continued to slide and hit the lowest in November to Rs 80,808 crore. The decline in tax collection will amplify the Centre's fiscal concerns ahead of the Union Budget, scheduled for February 1.
If the trend continues, it will have adverse implications on government spending and leave no room for the government to cut GST rates further in the near future.
Jammu and Kashmir Finance Minister (FM) Haseeb Drabu told BS that Nilekani's recommendations were logical. "The proposal seems to be very logical and doable. The IT committee headed by the GSTN chair will examine it," he said.
A final decision on the input tax credit issue is likely to be taken at the next GST Council meeting.
"Moving the onus of ensuring proper credits to businesses would be welcome if it is also accompanied by other procedural simplifications. It should be ensured that invoice matching, which is one of the key features of the GST is not sacrificed at the altar of expediency," MS Mani, partner at Deloitte India, told the business daily.
