Central Board of Indirect Taxes and Customs (CBIC) which is the apex body for the management of indirect taxation in India has brought certain changes in GST rules vide Notification No. 49/2019 – Central Tax dated 09th October 2019.

Among others, it has amended the rule no.36 of CGST Rule, 2017 by inserting new sub rule 4 which is reproduced as below-

“3. In the said rules, in rule 36, after sub-rule (3), the following sub-rule shall be inserted, namely:-

“(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.”

Explanation of the above sub rule 4

As per my understanding, from October -2019 and onwards with respect to unmatched tax invoices, tax payers shall be eligible to claim ITC -only 20% of the Tax invoices which reflect in GSTR-2A on the date of filing of GSTR-3B. Unmatched Tax Invoices means those invoices which are not available in GSTR-2A.

Example:-

The Purchase register of XYZ Private Limited shows following purchases from local GST registered vendors in the month of October-2019:-

Name of Vendors Taxable Value CGST @ 6% SGST @ 6% Remarks
A Enterprise 25,000.00 1,500.00 1,500.00 Reflected in GSTR-2A
B Enterprise 15,000.00 900.00 900.00 Reflected in GSTR-2A
C Pvt Limited 30,000.00 1,800.00 1,800.00 Not reflected in GSTR-2A as due date of Furnishing GSTR-1 is 31.01.2020 (Quarterly)
Total 70,000.00 4,200.00 4,200.00

Therefore his eligible ITC in the month of October will be as below:-

CGST= Rs. 2,880.00 [Rs 1,500.00 + Rs. 900.00 + 480.00 (20% of Rs.2, 400.00)]

CGST= Rs. 2,880.00 [Rs 1,500.00 + Rs. 900.00 + 480.00 (20% of Rs.2, 400.00)]

Note: Balance  ITC of Rs. 1,320.00 (Rs.1,800-480.00) CGST and SGST each will be available in the month  when this invoice will be reflected in GSTR-2A i.e. in the month of February-2020 assuming that seller files GSTR-1 on the last day of due date.

Additional Compliance burden on Tax payers:-

1. Reconcile Purchase ledger with GSTR-2A in every month to calculate eligible amount of ITC.

2. Regular follow-up and reminder to suppliers to file GSTR-1 so that full ITC can be availed.

3. Un-necessary blockage of ITC where GSTR-1 filing due date of supplier is on quarterly basis.

Applicable Date

The amendment is applicable from October-2019

Personal Comment

We should recall that GST was implemented by the Government with an aim to avail seamless Input Tax Credit. Due to decrease in revenue collection, Government is adopting unjustified rule without thinking the interest of tax payers. This provision of law is against principle of natural justice and should be challenged in Court of Law.

Author Bio

Qualification: CS
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Location: KOLKATA, West Bengal, IN
Member Since: 23 Sep 2019 | Total Posts: 3
CS Shambhu Nath Dhuria is a Company Secretary in Practice. He is dealing in GST, Income Tax and TDS matters. View Full Profile

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7 Comments

  1. ASHOK KANUNGA says:

    IN EXAMPLE —IN G.S.T.2A–I.T.C. available Rs. 2400.00 BUT NOT reflected Rs. 300.00 in GSTR-2A as due date of Furnishing GSTR-1 is 31.01.2020 (Quarterly) than how much I.T.C. TOTAL CAN CLAIM

  2. CA SUDIP KUMAR MUKHOPADHYAY says:

    MONTHLY RECONCILIATION WITH GSTR 2A WILL BE EFFECTIVE ONLY IF FILLING OF GSTR1 IS ON MONTHLY BASIS WITH PROVISION OF LATE FEE [ LIKE GSTR 3B PRESENTLY]

  3. PALASH KR. MUKHERJEE says:

    ELIGIBILITY OF ITC IS CONSIDERED FROM THE RECIPIENT ANGLE NOT FROM THE SELLER & GST PORTAL’S ANGLE.IF GOODS IS RECEIVED PHYGICALLY AND INVOICE IS IN THE HANDS OF RECIPIENT U/S16 OF GST& WHICH ARE NOT FALLING U/S 17 THAN THERE IS NO QUESTION OF INELIGIBILITY OF ITC.SO IT CONTRADICTS SEC-16 OF CGST ACTpalash_b7

  4. PRATHAPAN.S says:

    SIR …IT IS POSSIBLE ONLY IF THE GSTR -1 FILI NG DATE SHOULD BE MONTHLY …THEN THE PURCHASER CAN DEMEND HIS SUPPLIER TO UPLOAD THE INVOICE IF IT NOT UPLOAD…THEN THE PURCHASER CAN TAKE ACTIONS

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