GST ITC without invoice reflecting in GSTR 2A capped at 20%

GST ITC without invoice reflecting in GSTR 2A capped at 20%

Rule 36(4) of CGST Rules is given below for reference:

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.

A registered supplier is required to upload details of invoices in GSTR 1 on a periodical basis ( monthly or quarterly ). These invoice automatically reflects in GSTR 2A of purchaser. Thus, ideally the GSTR 2A must match with purchase ledger of the buyer. However, if the seller fails to upload any particular invoice, it won’t show up in GSTR 2A of purchaser. The new notification 49/2019 states that the purchaser can claim ITC credit on everything appearing in GSTR 2A ( eligible ITC only ) and also invoices not reflecting in GSTR 2A subject to maximum of 20% of what is appearing in GSTR 2A.

This has been explained with the help of Below mentioned examples:

Example 1:

Particulars	Actual ITC	Eligible ITC after amendment
Say total input amount for the month is Rs.	2000
ITC appearing in form GSTR-2A of GST portal	1200	1200 [No change]
ITC not appearing on GST portal in GSTR-2A	800	1200*20% = 240; or 800, whichever is lower i.e. 240
Total eligible ITC to be claimed in GSTR-3B for the month		1440
Restricted ITC under Rule 36(4)		2000-1440 = 560

Example 2:

Particulars	Actual ITC	Eligible ITC after amendment
Say total input amount for the month is Rs.	2000
ITC appearing in form GSTR-2A of GST portal	1800	1800 [No change]
ITC not appearing on GST portal in GSTR-2A	200	1800*20% = 360; or 200, whichever is lower i.e. 200
Total eligible ITC to be claimed in GSTR-3B for the month		2000
Restricted ITC under Rule 36(4)		2000-2000 = 0

 

Now this would mean that the businesses would now require to reconcile their books and GSTR-2A at time of filing GSTR-3B. Other wise they will face problem of miss-match and working capital blockage at time of filing their GSTR-3B.

This has increased the compliance requirement of Businesses and has shifted the burden of proof on the receiver of Input Tax Credit.

Tags : GST ITC without invoice reflecting in GSTR 2A capped at 20%, Capping of ITC to 20% ITC reflected in GSTR-2A, ITC limited to 20% if not reflected in GSTR 2A

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