CBIC notifies Central Goods and Services Tax (Sixth Amendment) Rules, 2019 vide Notification No. 49/2019 – Central Tax dated 09-10-2019 and made some important changes as given below-
1. ITC in respect of invoices or debit notes, the details of which have not been uploaded by the suppliers in GSTR-1, shall not exceed 20% of the eligible credit available in respect of invoices or debit notes the details of which have been uploaded by the suppliers in GSTR-1.
2. In the said rules, in rule 36, after sub-rule (3), the following sub-rule shall be inserted, namely:‑
“(4) Input tax credit 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.”
Explanation of the above sub rule 4
As per my understanding, from October -2019 and onwards with respect to unmatched tax invoices, tax payers shall be eligible to claim ITC -only 20% of the Tax invoices which reflect in GSTR-2A on the date of filing of GSTR-3B. Unmatched Tax Invoices means those invoices which are not available in GSTR-2A.
Example:-
The Purchase register of ABC Private Limited shows following purchases from local GST registered vendors in the month of October-2019:-
| Name of Vendors | Taxable Value | CGST @ 6% | SGST @ 6% | Remarks |
| X Enterprise | 25,000.00 | 1,500.00 | 1,500.00 | Reflected in GSTR-2A |
| Y Enterprise | 15,000.00 | 900.00 | 900.00 | Reflected in GSTR-2A |
| Z Pvt Limited | 30,000.00 | 1,800.00 | 1,800.00 | Not reflected in GSTR-2A as due date of Furnishing GSTR-1 is 31.01.2020 (Quarterly) |
| Total | 70,000.00 | 4,200.00 | 4,200.00 |
Therefore his eligible ITC in the month of October will be as below:-
CGST= Rs. 2,880.00 [Rs 1,500.00 + Rs. 900.00 + 480.00 (20% of Rs.2, 400.00)]
CGST= Rs. 2,880.00 [Rs 1,500.00 + Rs. 900.00 + 480.00 (20% of Rs.2, 400.00)]
Note: Balance ITC of Rs. 1,320.00 (Rs.1,800-480.00) CGST and SGST each will be available in the month when this invoice will be reflected in GSTR-2A i.e. in the month of February-2020 assuming that seller files GSTR-1 on the last day of due date.
Additional Compliance burden on Tax payers:-
1. Reconcile Purchase ledger with GSTR-2A in every month to calculate eligible amount of ITC.
2. Regular follow-up and reminder to suppliers to file GSTR-1 so that full ITC can be availed.
3. Un-necessary blockage of ITC where GSTR-1 filing due date of supplier is on quarterly basis.
Applicable Date
The amendment is applicable from October-2019
Personal Comment
We should recall that GST was implemented by the Government with an aim to avail seamless Input Tax Credit. Due to decrease in revenue collection, Government is adopting unjustified rule without thinking the interest of tax payers. This provision of law is against principle of natural justice and should be challenged in Court of Law since there are already existing restrictions where the suppliers invoices or debit notes if unpaid beyond 3 months of receipt, the input credit availed are to be reversed and allowed to be availed only when payment is effected. Hence such laws are without consideration to the easy of doing business and needs to be challenged and onus should be on the suppliers of output service for timely compliances.
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