"Challenges are opportunities in disguise."
On January 7, 2025, the GST Network (GSTN) issued an Advisory detailing the new functionality for taxpayers to file rectification applications concerning demand orders issued for incorrect Input Tax Credit (ITC) claims. This follows Notification No. 22/2024-CT, dated October 8, 2024, issued on the recommendation of the 54th GST Council meeting. The notification allows rectification of orders where ITC was wrongly availed due to contravention of section 16(4) of the CGST Act but is now permissible under newly added sub-sections 16(5) and 16(6).
Key Aspects of Notification No. 22/2024-CT
Eligibility for Rectification:
Registered persons who received demand orders under sections 73 or 74 for wrong ITC availment due to non-compliance with section 16(4) can now rectify these orders if the ITC is permissible under section 16(5) or 16(6).
Purpose:
This notification aims to provide relief to taxpayers by allowing corrections to previous ITC claims that are now compliant under the updated provisions of the CGST Act.
Filing Application for Rectification of Orders: Step-by-Step Guide
The following steps outline how to use the new GST Portal functionality to file an application for rectification of orders:
Step 1: Access the GST Portal
Visit www.gst.gov.in and log in using valid credentials.
Step 2: Navigate to My Applications
Click on Dashboard > Services > User Services > My Applications.
Step 3: Select Application Type
In the Application Type field, select "Application for rectification of order" and click the NEW APPLICATION button.
Step 4: Enter Order Details
Select the Order Number of the order to be rectified.
The Order Issue Date and Tax Period fields will auto-populate based on your selection.
Step 5: Provide Grounds for Rectification
In the Grounds for rectification field, enter: "Application of rectification of order under Notification No. 22/2024-Central Tax dated 08.10.2024".
Step 6: Upload Supporting Document
Click Choose File to upload the completed Annexure A proforma as required by Notification No. 22/2024. This is a mandatory step.
Step 7: Verification
Fill in the Verification details by selecting the declaration checkbox and choosing the name of the authorized signatory.
The Designation/Status and Date fields will auto-populate based on your selection. Enter the place of filing.
Step 8: Preview and Submit
Click PREVIEW to review the details entered. Once confirmed, click FILE to submit the application.
Practical Implications and Benefits
This update simplifies the process for taxpayers to correct past ITC claims, ensuring compliance with the latest provisions of the CGST Act. It helps taxpayers align their records with regulatory changes and reduces potential penalties or legal complications arising from past non-compliance.
In the initial two to three days of implementation, users might encounter minor issues or require adjustments to get accustomed to the new system. However, these initial hiccups are a small price to pay for the long-term benefits. Once the system is running smoothly, it will significantly ease the rectification process, enhancing efficiency and compliance.
By following the above steps, taxpayers can efficiently navigate the rectification process, ensuring their ITC claims are accurate and compliant with current GST regulations.
