The key summary of the circular has been given below for easy understanding:
What Businesses should do to align with the changes –
Illustration to explain the restriction and how it works –
|Scenario||Details of suppliers’ invoices for which recipient is eligible to take ITC||20% of eligible credit where invoices are uploaded||Eligible ITC to be taken in GSTR3B to be filed by 20th Nov.|
|Case 1||Suppliers have furnished in FORM GSTR-1 80 invoices involving ITC of Rs. 6 lakhs as on the due date of furnishing of the details of outward supplies by the suppliers.||Rs 1,20,000 (20% of Rs 6 Lakhs)||Rs. 6,00,000 (i.e. amount of eligible ITC available, as per details uploaded by the suppliers) + Rs.1,20,000 (i.e. 20% of amount of eligible ITC available, as per details uploaded by the suppliers) = Rs. 7,20,000/-|
|Case 2||Suppliers have furnished in FORM GSTR-1 80 invoices involving ITC of Rs. 7 lakhs as on the due date of furnishing of the details of outward supplies by the suppliers.||Rs 1,40,000 (20% of Rs 7 Lakhs)||Rs 7,00,000 + Rs. 1,40,000 = Rs. 8,40,000/-|
|Case 3||Suppliers have furnished in FORM GSTR-1 75 invoices having ITC of Rs. 8.5 lakhs as on the due date of furnishing of the details of outward supplies by the suppliers||Rs 1,70,000 (20% of Rs 8.50 Lakhs)||Rs. 8,50,000/- + Rs.1,50,000/-* = Rs. 10,00,000
* The additional amount of ITC availed shall be limited to ensure that the total ITC availed does not exceed the total eligible ITC.
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