Rule 36(4) of CGST Rules

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.

Do Not take 20% of ITC Availed in GSTR 3B

Exclusions

1. ITC on Imports of Goods & Services – 3A1 & 3A2 of GSTR 3B

2. ITC on RCM – 3A3 of GSTR 3B

3. ITC on ISD Invoices – 3A4 of GSTR 3B

Do Not Even take 20% of ITC Availed in 3A5 – All Other ITC

Exclusions from 3A5 : All Other ITC

1. ITC on inward supplies of Goods from SEZ – However Services Received from SEZ are eligible

2. Reclamation of ITC after reversal invoking 2nd provisio to Sec 16(2)

3. Excess reversal of ITC restored back under Rule 42(2) after final calculation

4. ITC travelling directly to Credit ledger like through ITC-01, ITC02, TRAN-1, TRAN-2 and TRAN-3 is also outside the purview of Rule 36(4)

Month for which return is filed Eligible ITC available in Purchase register Remarks
Invoice Dated ITC Eligible in GSTR-2A
Month for which return is filed : Apr’19 to Sep’2019  
 Apr’19 to Sep’2019 100 200 The entire 200 has been availed till Sep’19
Month for which return is filed : Oct’19  
Oct’19 80 300 – consisting of the following-

a. 200 for Apr’19 to Sep’19
b. 100 for Oct’19

 – 20 has already been availed till Sep’19. Hence it has to be excluded first
 Apr’19 to Sep’2019 20 120% of 80 = 96 can be availed for Oct’19
Month for which return is filed : Nov’19  
Nov’19 70 400 – consisting of the following-
a. 200 for Apr’19 to Sep’19
b. 100 for Oct’19
c. 100 for Nov’19
 – 20 has already been availed till Sep’19. Hence it has to be excluded first
Oct’19 20 What to Avail –

1. 120% of 70= 84?

2. [120% of 70 = 84 ] + [balance of Oct’19 (20-16) i.e. 4] = 88 ?

3. [120% of 90] = 108?

4. [120% of 170] – 96 = 108 SUBJECT TO 104.

But System Has No Way To Track This Anomaly. But Interest Liability May Be There During Assessment

 Apr’19 to Sep’2019 20

Process to be Followed Month on Month

Process to be Followed Month on Month

Contentious Issues

Contentious Issues

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Author Bio

Qualification: LL.B / Advocate
Company: Tax Connect Advisory Services LLP
Location: MUMBAI, Maharashtra, IN
Member Since: 10 Jan 2019 | Total Posts: 11
Mr. Vivek Jalan is a Fellow Member of the Institute Of Chartered Accountants of India (ICAI) & a qualified LL.B. He is the member of The CII- Economic Affairs & Taxation Committee. He is the Co Chairman of The Indirect Tax Committee of The Bengal Chamber of Commerce and Industry. He is also View Full Profile

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