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Circular No. 142/12/2020- GST
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F. No. CBIC/20/06/14/2020-GST
Government of India
Ministry of Finance
Department of Revenue
Central Board of Indirect Taxes and Customs
GST Policy Wing
New Delhi, the 9th October, 2020
To
The Pr. Chief Commissioners / Chief Commissioners / Principal Commissioners /
Commissioners of Central Tax (All),
The Principal Director Generals / Director Generals (All)
Madam / Sir,
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 – reg.
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 37of 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 11.11.2019 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 sub-
section (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
Circular No. 142/12/2020- GST
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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)
Circular No. 142/12/2020- GST
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5. It is requested that suitable trade notices may be issued to publicize the contents of this
Circular. Hindi version will follow.
6. Difficulty, if any, in implementation of this circular may please be brought to the notice of the
Board.
(Yogendra Garg)
Principal Commissioner (GST)
y.garg@nic.in
