The auto-generated tax credit statements are based on the information supplied by the persons from whom raw materials and services are purchased by a business
Businesses will now get auto-generated statements about the Goods and Services Tax (GST) credit that is due to them from the taxes previously paid on purchases of raw materials and services.
The auto-generated tax credit statements are based on the information supplied by the persons from whom raw materials and services are purchased by a business. The move, a self-policing feature in the GST system, is rolled out on Saturday by GSTN, the company that processes tax returns, according to an official statement.
The move seeks to make the entire value chain more transparent and accountable with respect to use of tax credits, an area that has historically been prone to tax evasion.
The statement said that the facility of auto-generated tax credit statement has been made available for July on a trial basis.
“GSTR-2B for the month of July has been made available on the common portal on trial basis. Since, this is the first time that the statement is being introduced, taxpayers are advised to refer to GSTR-2B for the month of July only for feedback purposes," said the statement.
"There were discussions on these linkages from a long time and were awaited by both the industry and the government. These linkages would definitely aid the government in checking tax evasion and also help industry in verifying the credits proposed to be availed by them," said Abhishek Jain, tax partner at EY.
The tax credit statement will be generated for every registered person on the basis of the information furnished by his suppliers in their respective tax returns about the sales they made, said GSTN.