Government has amended CGST Rules, 2017 vide notification issued on 9.10.2019. According to it, a new sub-rule (4) has been inserted after rule 36, which reads as follows:
“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.”
According to this notification, a registered person has to first eliminate, from Form GSTR-2A, ineligible credits, invoices erroneously uploaded by unknown vendors, transactions for which a valid tax invoice is not available etc, and determine the eligible input tax credit as per Form GSTR-2A. Thereafter, any difference between ITC as per GSTR-3B and Form GSTR-2A exceeding 20% of eligible input credit as per Form GSTR-2A, will not be eligible for input credit.
However, there is no clarity on the procedure for reversal and re-availment of input credit in excess of 20%. And therefore needs further clarification from the authorities.
Source: Notification No. 49/2019 – Central Tax, dated 9th Oct, 2019 issued by CBIC
