The (CBIC) Central Board of Indirect Taxes and Customs has issued clarification on the restrictions for availment of (Input Tax Credit) ITC Rule 36 (4) of the CGST Rules, 2017. The various issues related 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) in relation to availment of input tax credit (ITC) in respect of invoices or debit notes, for the details of which have not been uploaded by the suppliers under section 37 sub-section (1) of the Central Goods and Services Tax Act, 2017 has been clarified.
ITC Rule 36 (4) of the CGST must applicable to cumulatively for a tax period of Feb to Aug 2020
The Board while keeping in view the measures taken to stop the spread of the COVID-19 pandemic vide notification No. 30/2020-CT, published on 3rd April, 2020. It has been notified that the condition made under ITC Rule 36 (4) of the CGST Rules must be applicable cumulatively for a tax period of February, March, April, May, June, July and August, 2020. However, the return in FORM GSTR-3B for the tax period September, 2020 has to be furnished with the cumulative adjustment of the input tax credit for the above said months. The Board while exercising its powers conferred under section 168(1) of the CGST Act hereby clarifies to ensure uniformity in the implementation of the said provisions across the field formations.
The Board has reiterated that the clarifications issued earlier vide Circular No. 123/42/2019 GST dated 11th Nov 2019 must still remain applicable, except for a cumulative application as specified in the proviso to sub-rule (4) of rule 36 of the CGST Rules.
The Board has advised all the taxpayers to ascertain details of invoices that uploaded by their suppliers under section 37(1) of the CGST Act for the periods of February, March, April, May, June, July, and August, 2020, till a due date of furnishing of the statement in FORM GSTR-1 for a month of September, 2020 shall as reflected in GSTR-2As.
Other Important points of the Notification by CBIC
The Board pointed out the availability of 110% of the cumulative value of the eligible credit available in respect of invoices or debit notes and the details have been uploaded by the suppliers under section 37(1) of the CGST Act. This does not mean that the total credit can exceed the amount of tax 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.
The excess ITC availed arising out of reconciliation during this period, if any, will be required to be reversed, for the month of September 2020. Failure to reverse such excess availed ITC on account of the cumulative application of sub-rule (4) of rule 36 of the CGST Rules would be treated as availment of ineligible Input Tax Credit during a month of September, 2020.
The circular has also stated that the taxpayers will reconcile the (Input Tax Credit) ITC availed in theFORM GSTR-3Bs for a period Feb 2020 to Aug 2020 with the details of invoices uploaded by their suppliers of the said months, till the due date of furnishing FORM GSTR-1 for a month of September, 2020.
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