It is requested that Restriction in availment of input tax credit (ITC) imposed by Rule 36(4) of CGST Rules, 2019 be withdrawn from the retrospective effect as imposition of such restriction on the flow of credit based on the invoices uploaded by the suppliers would hit the taxpayers adversely, especially to those taxpayers who have been taking supplies from the supplier having turnover upto Rs. 1.5 crore, who are required to submit the return quarterly. 

Full Text of the Representation is as follows:-

The Institute of Chartered Accountants of India

GST & Indirect Taxes Committee

ICAI/IDTC/2020-21/Rep/3

3rd March, 2020

Shri M Ajit Kumar
Chairman,
Central Board of Indirect Taxes & Customs,
Government of India,
North Block,
New Delhi – 110001

Esteemed Sir,

Subject: Restriction in availment of input tax credit imposed by Rule 36(4) of CGST Rules, 2019

Greetings.

The Institute of Chartered Accountants of India (ICAI) has been proactively supporting the Government by providing its suggestions, creating awareness and disseminating knowledge of GST among various stakeholders.

It is hereby submitted that seamless credit of taxes paid at the earlier stage is the backbone of GST and is in line with the principle of good taxation over the world. However, the recently inserted sub-rule 4 to Rule 36 of Central Goods and Services Tax Rules, vide Notification No. 49/2019 – Central Tax dated 9th October, 2019 as amended by Notification No. 75/2019 – Central Tax dated 26th December, 2019 restrict the seamless flow of credit of input tax to trade and industry, are reproduced below:

“(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 10 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.”

The imposition of above restriction on the flow of credit based on the invoices uploaded by the suppliers would hit the taxpayers adversely, especially to those taxpayers who have been taking supplies from the supplier having turnover upto Rs. 1.5 crore, who are required to submit the return quarterly. Further, this will push the taxpayer to shift their procurement from such small supplier to larger supplier and may result in loss of market by such small supplier.

Therefore, it is prayed that in the interest of trade and industry and in line with Hon’ble Prime Minister ease of doing business initiatives, the above insertion of sub-rule 4 to Rule 36 be withdrawn from the retrospective effect.

We shall be glad to provide any further input as may be required and your office may reach us at [email protected] or 0120-3045954

Thanking you.

Yours faithfully,

CA. Rajendra Kumar P
Chairman
GST & Indirect Taxes Committee
The Institute of Chartered Accountants of India

Download Full Text of the Representation in PDF Format

Also Read other Recent ICAI Representation Related to GST

Provide login facility to CA to file Reconciliation Statement in Form GSTR 9C
Remove Difficulties in filing Annual Return in Form GSTR 9: ICAI
Permit availment of GST ITC pertaining to Financial Year 2018-19
Add Column for UDIN on Certificates/Reports: ICAI to CBIC
Reconsider increase in turnover to Rs. 5 Crore for filing GSTR-9C

More Under Goods and Services Tax

One Comment

  1. Ashish Shukla says:

    Dear sir,
    Kindly also request for removing of section 16 of cgst Act for taking credit limit (ITC).

    Atleast there should be a relief for first 2 years of GST implication.
    They have already given relief for 2017-18 ,but it should also extend for 2018-19.
    Please consider my request.

Leave a Comment

Your email address will not be published. Required fields are marked *

Search Posts by Date

May 2021
M T W T F S S
 12
3456789
10111213141516
17181920212223
24252627282930
31