Input Tax Credit Limited to
Suppliers Invoices Uploaded on GSTR 2A +20% Extra
·
More to Check Issue of Fake Invoices
only to Claim ITC
·
Limit to be Applied on Self-Assessment
Basis
·
Zero Rated Supplies to be Hit by New
Limit
[Circular
No. 123/42/2019– GST dated 11 November 2019]
Subject: Restriction in availment
of input tax credit in terms of sub-rule (4) of rule 36 of CGST Rules, 2017.
Sub-rule (4) to rule 36 of the Central Goods and Services Tax Rules, 2017
(hereinafter referred to as the CGST Rules) has been inserted vide notification
No. 49/2019-Central Tax, dated 09.10.2019. The said sub-rule provides restriction
in availment of input tax credit (ITC) in respect of invoices
or debit notes, the details of which have not been uploaded by the suppliers under
sub-section (1) of section 37of the Central Goods and Services Tax Act, 2017 (hereinafter
referred to as the CGST Act).
2. To ensure uniformity in the implementation of the provisions of the law
across the field formations, the Board, in exercise of its powers conferred under
section 168(1) of the CGST Act hereby clarifies various issues in succeeding paragraphs.
3. The conditions and eligibility for the ITC that may be availed by the
recipient shall continue to be governed as per the provisions of Chapter V of the
CGST Act and the rules made thereunder. This being a new provision, the restriction
is not imposed through the common portal and it is the responsibility of the taxpayer
that credit is availed in terms of the said rule and therefore, the availment of restricted credit in terms of sub-rule (4) of rule
36 of CGST Rules shall be done on self-assessment basis by the tax payers. Various
issues relating to implementation of the said sub-rule have been examined and the
clarification on each of these points is as under: –
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Sl. No |
Issue |
Clarification |
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1. |
What are
the invoices /debit notes on which the restriction under rule 36(4) of the CGST
Rules shall |
The restriction
of availment of ITC is imposed only in respect of those
invoices / debit notes, details of which are required to be uploaded by the suppliers
under sub-section (1) of section 37 and which have not been uploaded. Therefore,
taxpayers may avail full ITC in respect of IGST paid on import, documents issued
under RCM, credit received from ISD etc. which are outside the ambit of sub-section
(1) of section 37, provided that eligibility conditions for availment of ITC are met in respect of the same. The restriction
of 36(4) will be applicable only on the invoices / debit notes on which credit
is availed after 09.10.2019. |
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2. |
Whether
the said restriction is to be calculated supplier wise or on consolidated basis? |
The restriction
imposed is not supplier wise.The credit available under
sub-rule (4) of rule 36 is linked to total eligible credit from all suppliers
against all supplies whose details have been uploaded by the suppliers. Further,
the calculation would be based on only those invoices which are otherwise eligible
for ITC. Accordingly, those invoices on which ITC is not available under any of
the provision (say under sub-section (5) of section 17) would not be considered
for calculating 20 per cent. of the eligible credit available. |
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3. |
FORM GSTR-2A
being a
dynamic document, what |
The amount
of input tax credit in respect of the invoices / debit notes whose details have
not been uploaded by the suppliers shall not exceed 20% of the eligible input
tax credit available to the recipient in respect of invoices or debit notes the
details of which have been uploaded by the suppliers under sub-section (1) of
section 37 as on the due date of filing of the returns in FORM GSTR-1 of the
suppliers for the said tax period. The taxpayer may have to ascertain the
same from his auto populated FORM GSTR 2A as available on the due date of filing
of FORM GSTR-1 under sub-section (1) of section 37. |
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4. |
How much ITC a registered tax payer can avail in his |
Sub-rule (4) of rule 36 prescribes that the ITC to
be availed by a registered person in respect of invoices or debit notes, the details
of which have not been uploaded by the suppliers under sub-section (1) of section
37, shall not exceed 20 per cent. of the eligible credit
available in respect of invoices or debit notes the details of which have been
uploaded by the suppliers under sub-section (1) of section 37. The eligible ITC
that can be availed is explained by way of illustrations, in a tabulated form,
below. In the illustrations, say a taxpayer “R” receives
100 invoices (for inward supply of goods or services) involving ITC of Rs. 10 lakhs, from various suppliers during
the month of Oct, 2019 and has to claim ITC in his FORM GSTR-3B of October,
to be filed by 20th Nov, 2019.
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5. |
When can
balance ITC be claimed in case availment of ITC is restricted
as per the provisions of rule 36(4)? |
The balance
ITC may be claimed by the taxpayer in any of the succeeding months provided details
of requisite invoices are uploaded by the suppliers. He can claim proportionate
ITC as and when details of some invoices are uploaded by the suppliers provided
that credit on invoices, the details of which are not uploaded (under sub-section
(1) of section 37) remains under 20 per cent of the eligible input tax credit,
the details of which are uploaded by the suppliers. Full ITC of balance amount
may be availed, in present illustration by “R”, in case total ITC pertaining to
invoices the details of which have been uploaded reaches Rs.
8.3 lakhs (Rs 10 lakhs /1.20). In other words, taxpayer
may avail full ITC in respect of a tax period, as and when the invoices are uploaded
by the suppliers to the extent Eligible ITC/ 1.2. The same is explained for Case
No. 1 and 2 of the illustrations provided at Sl.No.
3 above as under:
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4. It is requested that suitable trade notices may be
issued to publicize the contents of this Circular.
F. No. CBEC – 20/06/14/2019 – GST