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We had already discussed about the provisions of Rule 36(4) of CGST in our earlier post titled- CGST Rule 36(4): ITC available only 20% more of Invoices uploaded by Supplier.  This is an explanation post with respect to the Circular No. 123/42/2019– GST dated 11th November 2019.  Let us discuss the practical process/journal entries of availing ITC restricted to 20% more of invoices uploaded by the suppliers in our books of accounts.

Month

Dr/Cr Particulars Amount

Amount

October

Debit Purchase A/c

 1,00,000

Debit

GST Input A/c

    18,000

Credit Creditors A/c

 1,18,000

Narration (Being purchase made)
Note: Total Input for the month of October is Rs.18000/- out of which invoices uploaded by the suppliers with ITC only of Rs.10000

Month

Dr/Cr Particulars Amount

Amount

October

Debit GST Deferred Input A/c

       6,000

Credit GST Input A/c

       6,000

Narration (Being Input deferred)
Note: Balance ITC of Rs.6000 i.e. (18000 – (10000 + (10000*20%)) is deferred

Month

Dr/Cr Particulars Amount

Amount

October

Debit GST Output A/c

    25,000

Credit GST Input A/c

    12,000

Credit GST Payable A/c

    13,000

Narration (Being GST payable for October)
Note: Eligible ITC of Rs.12000 i.e. (18000 – 6000) is adjusted against ouput and balance is payable

Month

Dr/Cr Particulars Amount

Amount

November

Debit Purchase A/c

    80,000

Debit GST Input A/c

    14,400

Credit Creditors A/c

    94,400

Narration (Being purchase made)
Note: Total Input for the month of October is Rs.14400/- out of which invoices uploaded by supplier with ITC only of Rs.11000

Month

Dr/Cr Particulars Amount

Amount

November

Debit GST Deferred Input A/c

       1,200

Credit GST Input A/c

       1,200

Narration (Being Input deferred)
Note: Balance ITC of Rs.1200 i.e. (14400 – (11000 + (11000*20%)) is deferred

Month

Dr/Cr Particulars Amount

Amount

November

Debit GST Output A/c

    30,000

Credit GST Input A/c

    13,200

Credit GST Deferred Input A/c

       4,800

Credit GST Payable A/c

    12,000

Narration (Being GST payable)
Note: Eligible ITC of Rs.13200 i.e. (14400 – 1200) is adjusted against ouput along with deferred ITC of Rs.4800 (4000 + (4000*20%)) where invoices for the ITC of Rs.4000/- are uploaded by supplier in November out of Rs.18000 of the ITC of the month of October

Month

Dr/Cr Particulars Amount

Amount

December

Debit Purchase A/c

 1,20,000

Debit GST Input A/c

    21,600

Credit Creditors A/c

 1,41,600

Narration (Being purchase made)
Note: Total Input for the month of October is Rs.21600/- (all the invoices uploaded by the supplier in the same month)

Month

Dr/Cr Particulars Amount

Amount

December

Debit GST Output A/c

    80,000

Credit GST Input A/c

    21,600

Credit GST Deferred Input A/c

       2,400

Credit GST Payable A/c

    56,000

Narration (Being GST payable)
Note: ITC of December of Rs.21600/- (fully uploaded) along with Deferred ITC of Rs.2400/- i.e. (Balance ITC of October Rs.1200 (18000 – 12000 – 4800) & Balance ITC of November Rs.1200 (14400 – 13200), considering all the balance invoices pertain to the month of October & November are uploaded, is adjusted with output and balance is payable

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