Table of Contents
- Gst Itc Available Only When Reflected In Gstr 2b/2a W.e.f. 01-01-2022
- Analysis Of Claiming Input Tax Credit With Effect From 01-01-2022 (section 16(2)(aa))
- After New Clause In Section 16(2)(a), The Effect Of The Changes Are Mention Below
- The 5% Restriction Indicated In Rule 36(4) Of The Central Goods And Services Tax Rules, 2017 Is Irrelevant.
GST ITC available only when reflected in GSTR 2B/2A w.e.f. 01-01-2022
Central Board of Indirect Taxes and Customs through Notification No. 39/2021–Central Tax dated Dec 21, 2021 which specified following amendments made vide Section 109 of the Finance Act, 2021 w.e.f. January 01, 2022
Section -16(2) : Conditions and Eligibility for claiming Input tax Credit with effect from From 01-01-2022 - Section 109 of the Finance Act, 2021
New Clause inserted in Section 16(2) through Notification No. 39/2021- Central Tax Dated 21-12-2021. The following is a new requirement for receiving an Input Tax Credit:
It was proposed to add a new clause '(aa)' to Section 16(2) of the CGST Act, after clause (a), that provides an additional condition for claiming ITC based on GSTR-2A and newly introduced GSTR-2B, particularly regarding, ITC on invoice or debit note can be claimed only when details of such invoice or debit note have been furnished by the supplier in his outward supplies (GSTR-1) and such details have been communicated to the recipient of such invoice or debit note.
Analysis of claiming Input tax Credit with effect from 01-01-2022 (Section 16(2)(aa))
- A tax invoice or debit note from a supplier is in the possession of the recipient;
- The supplier has provided the information of the above-mentioned invoice or debit note in the statement of outward supplies, and these details have been transmitted to the recipient in the manner prescribed by Section 37 of the CGST Act.
- Goods or Services, or both, have been given to the recipient.
- The tax levied in relation with such a supply has been paid to the government, and
- The return was filed under Section 39 of the CGST Act by the recipient.
Introduction of section 16(2)(aa) to the CGST Act to give powers to the govt to restrict availment of input tax credit to the extent of auto population in GSTR 2B thus paving the path for support in the act to notify provisions of Rule 36(4) of CGST Rules which is under challenge in various writ petitions across the nation.
After new clause in Section 16(2)(a), the effect of the changes are mention below
- Services or Goods or both purchased for official or business objective/purpose
(2) (a) Buyer or Recipient has Debit Note/Tax Invoice issued by Supplier;
(aa) Debit Note/Tax Invoice issued by Supplier has been filed in his GSTR-1 & showing or appearing in buyer’s GSTR-2B.
(b) Buyer or Recipient has received Service or Goods or both;
(C) Tax charged on such supply has been paid by cash or credit ledger and
(d) GSTR-3B has been filed.
(3) Depreciation is not claimed on GST Tax portion/component.
(4) Input tax credit claimed with in timeline date of Sept-3B of next Financial year.
The 5% restriction indicated in Rule 36(4) of the Central Goods and Services Tax Rules, 2017 is irrelevant.
- This revision was proposed to avoid unnecessary litigation and writ petitions challenging the validity of Rule 36(4) of the CGST Rules, which prescribes a similar condition with a 5% limit on ITC on invoices/debit notes not uploaded by the supplier in GSTR-1, which will be of no relevance w.e.f. January 01, 20
