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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

Author Bio

Post Graduate in Commerce having 17+ years of experience in Accounting & Taxation. Contact Email: uday.gstguide@gmail.com View Full Profile

My Published Posts

Reversal of ITC on High Sea Sales under Section 17 (2) of CGST Act Assessment of Non-filers of Return under Section 62 of CGST Act Availability of ITC for Supplies Obligatory for an Employer to its Employees Conditions for Export Supplies made under Bond or Letter of Undertaking (LUT) No Payments to Supplies among Related or Distinct Persons for Availing ITC View More Published Posts

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