Some important issues allied with newly inserted Sub rule 4 in Rule 36 of CGST Rules 2017.

To comply with recommendations made by GST Council decision, Central Government, vide Notification No. 49/2019 – Central Tax, makes the amendment in rules to amend the Central Goods and Services Tax Rules, 2017. Where in Government inserted sub rule 4 in rule 36 of Central goods and services Tax Rules, 2017. Which is reproduced below for your kind reference-

(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.

Newly inserted sub rule opens a Pitara (Box) of several unanswered questions. Now I would like to put some unanswered question associated with it before you for open discussion.

1. Whether 20% said limit has to be checked on respective monthly basis or cumulative monthly basis. If limit are required to be check on respective monthly basis, then what remedies are available to recipient if its supplier did not file his outward supply details till the 20th of the month succeeding such month.

2. What if invoices which are allied to period before 9th October 2019 and same has not reported by respective supplier in its GSTR-1. Whether such ITC related to such Invoices also are required to taken in to consideration for the calculation of said 20% limit.

3. If 20% said limit is required to check on monthly basis, then in such a scenario whether suppliers, who have opted for quarterly filing of GSTR-1, are required to update its supplies in its GSTR-1 on monthly basis.

4. What if respective supplier has filed its outward supplies details in a different financial year or after the due date of furnishing of the GSTR-1 return for the month of September following the end of financial year?

5. Last but not least, for said 20% limit, what is meaning 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.

Whether it is the amount of eligible credit available as per GSTR-2A of eligible credit as per Section 16 of CGST Act read with other sections related thereto.

I requesting all of you to provide your valuable comments on aforementioned issued.

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