Amendment in Rule 36(4) of CGST Rule 2017 i.

e conditions for claiming ITC

Restriction in availment of input tax credit in terms of sub-rule (4) of rule 36 of CGST Rules,
2017:

In a major overhaul of how input credit is availed by businesses, the Government has issued notification
in case where there is a mismatch or details have not been uploaded by the suppliers, input tax claim
will not exceed 20 per cent of the eligible credit available in respect of invoices or debit notes
uploaded by the suppliers. This is expected to have a significant impact on cash flow of firms.

“As per the amended CGST Rules input tax credit to be availed by a registered person, the details of
which have not been uploaded by the suppliers, shall not exceed 20 per cent of the eligible credit
available in respect of invoices or debit notes uploaded by the suppliers. This means going forward, it
will be mandatory for the buyers to match the ITC claimed with the details uploaded by the vendors,”.
The recipient has to reconcile purchase as appearing in Books of accounts with GSTR-2A on month to
month basis.
Recipient has to take regular follow up with supplier so that supplier files his GSTR-1 within due date
and upload every invoice.
It would greatly impact working capital and cash-flow, if mismatches arise in GSTR-2A and ITC claimed.
The availment of restricted credit as per Rule 36(4) shall be done on self-assessment basis by the tax
payers.
Please check below mentioned examples for your understanding, -
In the illustrations, say a taxpayer “R” receives 100 invoices (for inward supply of goods or services) involving ITC of Rs.10 lakhs, 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.
Maximum
Eligible Balance
ITC to be ITC can
availed by be
dealer in claimed
respect of as per
Total 20% of invoices Eligible Let’s Colum 11
Eligible eligible which ITC to be Assume, if
Purchase Total credit have not taken in In GSTR Supplier
s Inv as Total ITC Inv as ITC where been GSTR- 2A, next Balance upload
per as per per ITC as Missing invoices uploaded 3B to be month of ITC can invoices
S. Actual Actual GSTR per in GSTR are by filed by ITC be involving
No. Data Data 2A GSTR-2A 2A uploaded supplier 20th Nov. reaches to claimed ITC of Rs
8=
Minimum
1 2 3 4 5 6= 3-5 7=5* 20% of 6 & 7 9= 5+8 10 11=3-9 12=10-5
Case 100 10,00,000 80 6,00,000 4,00,000 1,20,000 1,20,000 7,20,000
-1 8,30,000 2,80,000 2,30,000
Case 100 10,00,000 80 7,00,000 3,00,000 1,40,000 1,40,000 8,40,000
-2 8,30,000 1,60,000 1,30,000
Case 100 10,00,000 75 8,50,000 1,50,000 1,70,000 1,50,000 10,00,000
-3 8,30,000

RSVA & Co, Chartered Accountants, Pune Mail Id: gst@rsva.co.in, Contact: 020 24487900/97670888222
 Amendment in Rule 36(4) of CGST Rule 2017 i.e conditions for claiming ITC

This information meant to be an indicative guide in nature. The action points for any individual
business can be different depending on various business factors.
For any additional information, please write in to gst@rsva.co.in

With Best Regards,

Indirect Tax Team,
RSVA & Co, Pune Branch
Date:11/11/2019

RSVA & Co, Chartered Accountants, Pune Mail Id: gst@rsva.co.in, Contact: 020 24487900/9767088822