Notification No. 49/2019 – Central Tax dated 9 October 2019 has announced a major change in availment of Input Tax Credit (‘ITC’) while filing monthly GST returns.
Section 43(A) of CGST Act, 2017 (‘the Act’) and the recent amendment in rule 36 of the CGST Rules, 2017 provides that an assesse can claim twenty percent of eligible ITC on inward supplies for which details have not been furnished by the outward supplier in its GSTR 1.
The same can be explained as under;
| S. No. | Particulars | CGST | SGST | IGST |
| 1. | Total ITC as per GSTR 2A of assesse | 100,000 | 100,000 | 120,000 |
| 2. | Eligible ITC as per GSTR 2A of assesse | 80,000 | 80,000 | 110,000 |
| 3. | 20% of eligible ITC | 16,000 | 16,000 | 22,000 |
| 4. | Maximum ITC availment as per recent amendment | 96,000 | 96,000 | 132,000 |
| 5. | Available ITC as per Purchase register of assesse | 120,000 | 120,000 | 130,000 |
| 6. | Total ITC which assesse can claim | 96,000 | 96,000 | 130,000 |
This amendment would lead to additional compliances for the companies enumerated as under:
- Monthly reconciliation of GSTR 2A and Purchase register
- Follow up with the vendors for uploading the invoices on monthly basis
- Classification of eligible and ineligible credit in the GTSR 2A
- Impact on working capital and cash flow
- Would lead to additional compliance burden this month, as reconciliation for missed credit for FY 2018-19 also needs to be calculated and incorporated in GSTR 3B
Author’s view:
This amendment would lead to additional burden to the companies. The ITC availment prior to this was assesse friendly as the reconciliation of missed ITC was to be made at asessees’s ease (majorly annually) and not monthly as introduced by this amendment.
Author Bio
Already GDP is below 5% & This new GST amendment further harassing business pupil & cut down their Sales.
Dear Ma’am,
Please elaborate your given example.
How can Assessee can claim Input of IGST of Rs. 1,30,000/- out of Rs. 1,10,000/- eligible ITC available in GSTR 2A.
Can we ask our doubts ?Will it be possible to clarify?
this is worst ammendments which i never expected. Instead of simplication , they making more and more complex.