Reference:- Circular No. 123/42/2019– Dt. 11-11-2019, in regards to the clarification on availment of ITC from Current Month
For your ease of understanding, we summarised the same circular as follows;
|Whether Common Portal Restrict the Credit or Not?||No, Assessee is required to Calculate and Declare the same on Self-Assessment Basis|
|Whether All Invoices or Debit Notes Covered Under this Rule?||No, Only Those Invoices which are required to upload by the Supplier and Credit of the same is availed after 09-10-2019.
Means, ITC i.r.t. Taxes Paid on Imports, RCM, ISD Credit Notes, etc not covered under this rule.
Further, Invoices or Debit Notes on which Credit is already availed upto 09-10-2019 are also outside from the purview of this rule.
|Whether the Restriction is applied party-wise or on the consolidated amount?||The restriction is applied on all the total eligible Credit basis.
Means, Invoices that are not eligible for ITC [example supply covered u/s. 17(5)] would not be covered in the calculation of 20% of eligible credit.
|When to Check Form GSTR-2A for Calculating ITC Amount||Date on which Tax Liability is calculated.|
|What amount of ITC a registered person can avail in GSTR-3B.||As per Rule 36(4), ITC of the Invoices which are not reflecting in the GSTR-2A, shall be 20% of the eligible credit reflecting in GSTR-2A.
Lets Understand the same with the Illustration given below the table.
|When The taxpayer can claim Balance ITC?||When the Same Invoices Reflected in the GSTR-02A of the Taxpayer.|
In the following illustrations, assume a taxpayer “R” receives 10 invoices involving ITC of Rs. 1 Lac, from various suppliers during the month of Oct, 2019 and has to claim ITC in his FORM GSTR-3B of October, to be filed by 20th Nov 2019.
|Case||Details of Supplier Invoices, viz. eligible for ITC, has been furnished by Supplier||20% of eligible credit for Invoice not uploaded by supplier||Net Eligible ITC to be taken in GSTR-3B to be filed for M/o. Oct-2019|
|1||8 Invoices, with ITC of Rs. 60,000/-||Rs. 12,000/-||Rs. 72,000/-|
|2||4 Invoices, with ITC of Rs. 50,000/-||Rs. 10,000/-||Rs. 60,000/-|
|3||6 Invoices, with ITC of Rs. 70,000/-||Rs. 14,000/-||Rs. 84,000/-|
|4||9 Invoices, with ITC of Rs. 95,000/-||Rs. 19,000/-||Rs. 1,00,000/- (i.e. Rs. 95,000/- + Rs. 5,000/-*)
* Net Eligible ITC (Incl. the additional amount of ITC availed) shall not exceed the total eligible ITC.
So, what your accounts team need to do:- we request you to please consider the following from the Current Month at the time or before the Filing of GSTR-3B, to avoid Interest, Penalty and litigation in the future;