Introduction: CBIC vide notification number 49/2019 –CT dated 09.10.2019 made the amendment in CGST Rules, 2017. Through this notification, CBIC notifies the GSTR 2A reconciliation on monthly basis which leads to the blockage of credit or leads to outflow of the cash by not allowing the ITC exceeding the 20% of eligible credit of invoices or debit notes uploaded by supplier for the invoices or debit notes have not uploaded by supplier in his GSTR-1 by whatever reasons.
New provision inserted Rule 36(4);
“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.”
Let us illustrate;
|Invoices reflecting in GSTR 2A||A||2,00,000/-|
|Debit notes as reflecting in GSTR 2A||B||40,000/-|
|Credit notes as reflecting in GSTR 2A||C||20,000/-|
|Total Credit as per GSTR 2A||D=A-B-C||2,20,000/-|
|Invoices or debit notes that matches with GSTR 2A||E||1,35,000/-|
|Invoices or debit notes found in GSTR 2A but credit can be availed in next tax periods in compliance with section 16||F||25,000/-|
|Invoices or debit notes not found in GSTR 2A but the invoices and goods received during tax periods (May be QTRLY filers etc.)||G||60,000/-|
|Invoices or debit notes as reflecting in GSTR 2A but not related to taxpayer (Not eligible for credit)||H||20,000/-|
|Total of (E+F+G+H) = (A+B)||2,40,000/-|
|Common ITC attributed to exempt supply out of E||I||10,000/-|
|Credit restricted under section 17(5) out of E||J||10,000/-|
|Credit attributed to non-business purpose out of E||K||12,000/-|
|Credit attributed to used exclusively for exempt supply out of E||L||13,000/-|
|Eligible Credit (E-I-J-K-L)||M||90,000/-|
|20% of Eligible Credit (M*20%)||N||18,000/-|
|Credit can be availed for point G or N, whichever is lower||O||18,000/-|
|Total ITC can be availed (E+O)||1,53,000/-|
Please note that regarding the credit note as referred in point no. C, Credit as referred in point no. F and H need the more clarification whether these shall be included or not while computing the eligible Credit .
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