The CBIC has notified the new Input Tax Credit (ITC) rules w.e.f 09th October 2019. The new ITC rules restrict GST Credit (ITC) in relation to invoices, and debit notes received from the suppliers that are not reflecting in GSTR 2A
Earlier, the business can take the entire Input tax credit on the self-assessment basis even if the invoices are not uploaded by the supplier. But with effective, 09th Oct 2019, the business can claim only 20% of eligible GST credit if the suppliers have not uploaded their B2B invoices through GSTR 1.
Example: Mr Ram has purchased good from Krishna, Arjun and Bharath. The Total Input Tax Credit available on different purchases is as follows
Krishna – 30,000; Arjun – 15,000; Bharath- 45,000. Among these three, Bharath has not filed his GSTR 1.
Earlier Scenario: Mr Ram can claim the entire input tax credit of Rs 90,000 even if his suppliers has not uploaded invoices in GSTR 1
Present Scenario: Mr Ram can claim the full credit of Rs 45,000 from Krishna and Arjun. The credit of Rs 45,000 from Bharath cannot be claimed fully. Ram can claim only 20% of Rs 45,000 i.e., Rs 9,000 while filing his return. The rest 80% can be claimed in the month when it is reflecting in GSTR 2A.
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