Circular No. 123/42/2019– GST
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F. No. CBEC – 20/06/14/2019 – GST
Government of India
Ministry of Finance
Department of Revenue
Central Board of Indirect Taxes and Customs
GST Policy Wing
******
New Delhi, the 11th November, 2019
To
The Pr. Chief Commissioners / Chief Commissioners / Principal Commissioners /
Commissioners of Central Tax (All),
The Principal Director Generals / Director Generals (All)
Madam / Sir,
Subject: Restriction in availment of input tax credit in terms of sub-rule (4) of rule 36 of
CGST Rules, 2017 – reg.
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: -
Sl.
No
Issue
Clarification
1.
What are the invoices
The restriction of availment of ITC is imposed only in respect
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/ debit notes on which
the restriction under
rule 36(4) of the CGST
Rules shall apply?
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.
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.
3.
FORM GSTR-2A
being
a
dynamic
document,
what
would be the amount
of input tax credit that
is admissible to the
taxpayers
for
a
particular tax period in
respect of invoices
/ debit notes whose
details have not been
uploaded by the
suppliers?
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.
4.
How much ITC a
registered tax payer
can avail in his FORM
GSTR-3B in
a month in case the
details of some of the
invoices have not been
uploaded
by
the
suppliers under sub-
section (1) of section
37.
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.
Circular No. 123/42/2019– GST
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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.
Details
of 20% of
Eligible ITC to be
suppliers’
eligible credit taken in GSTR-
invoices
which
for where
invoices are
3B to be filed by
20th Nov.
recipient
is uploaded
eligible
to
take ITC
Case Suppliers have
Rs.1,20,000/-
Rs. 6,00,000 (i.e.
1
furnished in
amount of eligible
FORM
ITC available, as
GSTR-1 80
per
details
invoices
uploaded by the
involving ITC
suppliers)
+
of Rs. 6 lakhs
Rs.1,20,000
(i.e.
as on the due
20% of amount of
date of
eligible
ITC
furnishing of
available, as per
the details of
details
uploaded
outward
by the suppliers) =
supplies by the
Rs. 7,20,000/-
suppliers.
Case Suppliers have
Rs. 1,40,000/-
Rs 7,00,000 + Rs.
2
furnished in
1,40,000
=
Rs.
FORM
8,40,000/-
GSTR-1 80
invoices
involving ITC
of Rs. 7 lakhs
as on the due
date of
furnishing of
the details of
outward
supplies by the
suppliers.
Case Suppliers have
Rs. 1,70,000/-
Rs. 8,50,000/- +
3
furnished in
Rs.1,50,000/-*
=
FORM
Rs. 10,00,000
GSTR-1 75
invoices
* The additional
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having ITC of
Rs. 8.5 lakhs
as on the due
date of
furnishing of
the details of
outward
supplies by the
suppliers.
amount
of
ITC
availed shall be
limited to ensure
that the total ITC
availed does not
exceed the total
eligible ITC.
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. 4 above as under:
Case
1
“R” may avail balance ITC of Rs. 2.8 lakhs in case
suppliers upload details of some of the invoices for the
tax period involving ITC of Rs. 2.3 lakhs out of
invoices involving ITC of Rs. 4 lakhs details of which
had not been uploaded by the suppliers. [Rs. 6
lakhs + Rs. 2.3 lakhs = Rs. 8.3 lakhs]
