NEW PROCEDURE TO CLAIM INPUT TAX CREDIT WITH EFFECT FROM 09.10.2019 (Vide Notification no. 49/2019 dated 09.10.2019)
♦ Input Tax Claim shall not exceed GSTR 2A Total ITC + 20% of GSTR 2A ITC Amount (This amount should not exceed Eligible credit for the month)
For e.g. : If eligible ITC for the month of October 2019 is Rs 10 Lakhs, and ITC available in GSTR 2A is Rs 8 Lakhs, eligible ITC is: 8 Lakhs + 20% of 8 Lakhs = 9.6 Lakhs) .
In this case , if the dealer have 8.3 Lakhs or more in GSTR2A , dealer can claim full ITC ( Rs 10 Lakhs) in GSTR3B of October 2019. (This is because, the gap between the available credit in GSTR2A (Rs. 8.3 Lakhs) and The ITC Claim (Rs. 10.00 Lakhs) for the month of October 2019 is below or equal to 20% of GSTR2A amount. If the gap is below or equal to 20%, dealer can claim 100% ITC in the month of October 2019)
SAMPLE WORKINGS:
If the dealer have credit in 2A IS below Rs 8.3 Lakhs , the ITC eligibility is restricted to 20 % of eligible credit available in GSTR 2A. Please find the below table (THREE CASES GIVEN AS SAMPLE) for calculating eligible ITC for October 2019:
| Case | Available Balance in GSTR 2A for October 2019 | 20% of Eligible Credit (A*20%) | Eligible ITC to be taken in GSTR 3B (A+B) |
| A | B | C | |
| Case 1 | 6,00,000 | 1,20,000 | 7,20,000 |
| Case 2 | 7,00,000 | 1,40,000 | 8,40,000 |
| Case 3 | 8,50,000 | 1,70,000 | 10,00,000* |
*8,50,000 + 1,70,000= 10,20,000 , Eligible ITC limited to Rs 10,00,000
♦ How the the balance ITC to be claimed
The balance ITC be claimed by the taxpayer in any of the succeeding months (November 2019 onwards) provided details of requisite invoices are uploaded by the suppliers.
Procedure and Calculations for availing the balance ITC of October 2019 is given below with reference to CASE 1 given above:
| Return Month | Available in GSTR2A against October (assumptions) | Already availed ITC Or Eligible ITC in each month from October | Cumulative ITC balance of October month | Calculation for arriving Column F |
| D | E | F | G | |
| October 2019 | 6,00,000 | 7,20,000 | 7,20,000 | =600000*1.20 |
| November 2019 | 1,20,000 | 1,00,000 | 8,20,000 | =1,20,000/1.20 |
| December 2019 | 80,000 | 67,000 | 8,87,000 | =80,000/1.20 |
| January 2020 | 40,000 | 33,000 | 9,20,000 | =40,000/1.20 |
| February 2020 | 30,000 | 25,000 | 9,45,000 | =30,000/1.20 |
| March 2020 | 1,30,000 | 55,000* | 10,00,000 | Already availed 9.45 Lakhs .Balance can avail only 0.55 Lakhs |
| Total | 10,00,000 | 10,00,000 |
Additional Notes:
- The restriction imposed is on consolidated basis and not supplier wise.
- The above rule is not applicable in the following cases:
- ITC against import purchase (ITC against import should be given in GSTR 3B in the corresponding column of import purchase and not to be given in All Other ITC).
- ITC against Reverse Charge Mechanism.
- Credit received from Input Service Distributor.
- Any ineligible ITC in GSTR 2A to be excluded from the calculation of the above rule.
- Any previous month ITC included in current month GSTR 2A to be separately taken.
SUGGESTION: TO AVOID THE ABOVE COMPLICATED CALCULATIONS, YOU CAN OPT FOR A BETTER WAY IN RETURN FILING. CLAIM ITC AS PER RESPECTIVE GSTR 2A ONLY. IF THE DEALER HAS SUFFICIENT ACCUMULATED ITC IN THEIR CREDIT LEDGER, OPT FOR THIS OPTION. SO, YOU WILL BE FREE FROM THE ABOVE SAID CALCULATIONS AND RULES.
Author Bio
I feel there is some thing wrong in calculation in case 1
ITC of Rs.10 lakh in October can be availed according to ITC available in 2A in months as under:
Oct. – 720000 against 600000 in 2A
Nov. – 144000 against 120000 in 2A
Dec – 96000 against 80000 in 2A
Jan – 40000 against 40000 in 2A
Feb – 0 against 30000 in 2A
Mar – 0 against 130000 in 2A
If still I am wrong please clarify.