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Notification No. 35/2020-Central Tax, dated 03/04/2020
In yet another measure to ease the life for truckers amidst the disruption due to lockdown, the Government has extended the validity of all e-way bills and deferred the restriction of 10% on input tax credit under GST. This comes as a relief to the transporters who were already struggling with cash flow issues.
The Finance Ministry issued a notification on Friday saying “Where an e-way bill has been generated and its period of validity expires during the period 20th day of March, 2020 to 15th day of April, 2020, the validity period of such e-way bill shall be deemed to have been extended till April 30, 2020”.
With many trucks stuck in transit across India, most e-waybills had already expired. It is now expected that state level authorities will not penalize the transporters whose transport is affected by the expired eway bills.
Restriction of 10% input tax credit claim has been lifted temporarily
Since January 2020, input tax credit claims had been restricted to 10% of the eligible credit if corresponding invoices were not uploaded on the GST portal. This was done to curb the rise in fraud input tax credit claims.
The finance ministry has now deferred the application of 10% restriction for availing input tax credit for invoices raised between Feb 2020 to Aug 2020. Although, it is to be noted that the cumulative invoices have to be submitted on GST portal along with form GSTR-3B in the month of September, 2020, giving the industry a seven-month window that will ease out cash flows, experts said.
This move is expected to benefit all the 3PL companies and transporters who were availing benefit of the input tax credit mechanism.