Availment of Input Tax Credit
under Rule 36(4) of CGST Rules 2017
·
Circular clarifying issues relating to application of sub-rule (4) of
rule 36 of the CGST Rules, 2017, cumulatively for the months of February, 2020
to August, 2020
[Circular
No. 142/12/2020- GST dated 9 October 2020]
F. No. CBIC/20/06/14/2020-GST
Subject: Clarification relating to application
of sub-rule (4) of rule 36 of the CGST Rules, 2017 for the months of February,
2020 to August, 2020.
Vide Circular No. 123/42/2019
– GST dated 11th November, 2019, various issues relating to implementation of sub-rule
(4) of rule 36 of the Central Goods and
Services Tax Rules, 2017 (hereinafter referred to as the CGST Rules) relating
to 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 37 of the Central Goods and
Services Tax Act, 2017 (hereinafter referred to as the CGST Act) were clarified.
2. Keeping the situation prevailing in view of measures taken to contain
the spread of COVID-19 pandemic, vide notification No.
30/2020-CT, dated 03.04.2020, it had been prescribed that the condition made under
sub-rule (4) of rule 36 of the CGST Rules shall apply cumulatively for the tax period
February, March, April, May, June, July and August, 2020 and that the return in
FORM GSTR-3B for the tax period September, 2020 shall be furnished with the cumulative
adjustment of input tax credit for the said months.
3. To ensure uniformity in the implementation of the said provisions across
the field formations, the Board, in exercise of its powers conferred under section
168(1) of the CGST Act hereby clarifies certain issues in succeeding paragraphs.
3.1 It is re-iterated that the clarifications issued earlier vide Circular No. 123/42/2019
– GST dated 11th November, 2019, shall still remain applicable, except for the cumulative
application as prescribed in proviso to sub-rule (4) of rule 36 of the CGST Rules.
Accordingly,
all the taxpayers are advised to ascertain the details of invoices uploaded by their
suppliers under subsection (1) of section 37 of the CGST Act for the periods of
February, March, April, May, June, July and August, 2020, till the due date of furnishing
of the statement in FORM GSTR-1 for the month of September, 2020 as reflected
in GSTR-2As.
3.2 Taxpayers shall reconcile the ITC availed in their FORM GSTR-3Bs for
the period February, 2020 to August, 2020 with the details of invoices uploaded
by their suppliers of the said months, till the due date of furnishing FORM GSTR-1
for the month of September, 2020. The cumulative amount of ITC availed for the
said months in FORM GSTR-3B should not exceed 110% of the cumulative value
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
of the CGST Act, till the due date of furnishing of the statements in FORM GSTR-1
for the month of September, 2020.
3.3 It may be noted that availability of 110% of the cumulative value 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
of the CGST Act does not mean that the total credit can exceed the tax amount as
reflected in the total invoices for the supplies received by the taxpayer i.e. the
maximum credit available in terms of provisions of section 16 of the CGST Act.
3.4 The excess ITC availed arising out of reconciliation during this period,
if any, shall be required to be reversed in Table 4(B)(2) of FORM GSTR-3B,
for the month of September, 2020. Failure to reverse such excess availed ITC
on account of cumulative application of sub-rule (4) of rule 36 of the CGST Rules
would be treated as availment of ineligible ITC during
the month of September, 2020.
4. The manner of cumulative reconciliation for the said months in terms of
proviso to sub-rule (4) of rule 36 of the CGST Rules is explained by way of illustration,
in a tabulated form, below.
Table I
|
Tax period |
Eligible ITC as per the provisions of Chapter V of the CGST Act and
the rules made thereunder, except rule 36(4) |
ITC availed by the taxpayer (recipient) in GSTR- 3B of the respective
months |
Invoices on which ITC is eligible and uploaded by the suppliers till
due date of FORM GSTR-1 for the tax period of September, 2020 |
Effect of cumulative application of rule 36(4) on availability of ITC. |
|
Feb, 2020 |
300 |
300 |
270 |
Maximum eligible ITC in terms of rule 36 (4) is 2450 + [10% of 2450]
=2695. Taxpayer had availed ITC of 2750. Therefore, ITC of 55 [2750-2695]
would be required to be reversed as mentioned in para 3.4 above. |
|
March, 2020 |
400 |
400 |
380 |
|
|
April, 2020 |
500 |
500 |
450 |
|
|
May, 2020 |
350 |
350 |
320 |
|
|
June, 2020 |
450 |
450 |
400 |
|
|
July, 2020 |
550 |
550 |
480 |
|
|
August, 2020 |
200 |
200 |
150 |
|
|
TOTAL |
2750 |
2750 |
2450 |
|
|
ITC Reversal required to the
extent of 55 |
||||
|
September, 2020 |
500 |
385 |
350 |
10% Rule shall apply independently for September, 2020 |
|
In the
FORM GSTR-3B for the month of September, 2020, the tax payer shall avail ITC
of 385 under Table 4(A) and would reverse ITC of 55 under Table 4(B)(2) |
||||
5. It is requested that suitable trade notices may be issued to publicize
the contents of this Hindi version will follow.
6. Difficulty, if any, in implementation of this circular may please be brought
to the notice of the Board.