Restriction on availment of Input Tax Credit (ITC) w.e.f Oct 2019

The CBDT vide its Notification No 49/2019 has inserted a new rule – Rule 36(4) in Central Goods and Services Tax Rules,2017.

The New Rule is as follows :-

“ (4) 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. ”

Earlier Position of availment of ITC (before introduction of this Rule)

The Input tax Credit (ITC) on inward supplies were provisionally allowed to be claimed irrespective of the fact whether the supplier has uploaded and paid the taxes on those supplies.

(i.e.,) You can claim the Input Tax Credit (ITC) even if your supplier has not filed his GST Returns showing supplies to you and paid the taxes on the same. You got some time to check and follow up with your supplier to make him declare the invoice relating to you.

Present Position after introduction of this New Rule 36(4)

The Input Tax credit which is appearing in your GSTR 2A (Invoices uploaded by your supplier) only can be claimed in your GSTR 3B as Input Tax credit.

In respect of Invoices /Supplies received by you, but the same is not appearning in GSTR 2A (Invoices not uploaded by your supplier), you can claim ITC only to the extent of 20% on Invoices uploaded by the suppliers.

CaseITC as per Books (Rs.)ITC as per GSTR 2A (Rs.)ITC that can be availed in GSTR 3B(Rs.)
110,00,0006,00,0007,20,000 (6L as appearing in GSTR 2A + Rs. 1.2L -20% of 6 L)
210,00,0007,00,0008,40,000 (7 L as appearing in GSTR 2A + Rs. 1.4L – 20% of 7L)
310,00,0008,50,00010,00,000 (8.5 L + 1.5L (1.7L which is 20% of 8.5 Lakhs restricted to 1.5L since total ITC is 10 Lakhs)

Note :-  To claim the entire ITC of Rs. 10 Lakhs, the minimum amount that should have been uploaded by your supplier should be Rs. 8.33 Lakhs (10 Lakhs / 1.2)

Other Important Points to be Noted

  • This restriction is applicable only in respect of Invoices,Debit-notes, which are required to be uploaded by the suppliers.
  • Full ITC can be availed in respect of IGST on Imports, RCM & Credit received from ISD (Input Service Distributors)
  • The other eligible conditions for claim of ITC should be taken care to claim the ITC.
  • The new restriction u/s. 36(4) will be applicable only in respect of invoices/debit Notes on which credit is availed after 9th Oct 2019.
  • For calculating the 20% eligibility, only eligible ITC to be taken. For example, Blocked credits under section 17(5) should not be considered for calculating 20% of the eligible credit available.
  • Credit Matching is a continuous exercise & GSTR 2A is a cumulative or year-to-date document. Ensure that this credit matching exercise is carried for the cumulative value of credits appearing in GSTR 2A after excluding credits that have already been taken up to the previous month.
  • If you are purchasing from a SME dealer (with Turnover less than 1.5 Crores), since he files his GSTR 1 on Quarterly basis, you have to wait till the quarter end to avail your ITC from such supplies. If your major portion of your purchases is from SMEs, you stand to loose because of this provision.
  • On the other hand, if you are a supplier to Large corporate houses & if you are a SME taxpayer, the Large corporate houses may prefer purchasing from dealers making monthly returns.(or) They may restrict payment of your invoice amount only to the taxable value portion of the Invoice ( and not the GST amount) which may lead to working capital problems for the SME suppliers.
  • This is like a curtain raiser for the proposed new GST Returns which are going to be applicable w.e.f 1st Apr 2020 wherein you will be allowed to claim credit only if it is uploaded by the suppliers.(Subject to option of adding missing invoices)

The following notifications are appended herewith :

  • Notification No 49/2019 – Central Tax dtd 9th Oct 2019
  • Circular No 123/42/2019-GST dtd 11th Nov 2019

Download (PDF, Unknown)

Download (PDF, Unknown)


Reverse Charge payment of GST suspended till 30th September 2019

As you are aware, as per Section 9(4) of the CGST Act, GST is payable under Reverse Charge basis in respect of inward supplies from unregistered suppliers.  This was deferred by notification till 30th of September 2018 earlier. Now another notification has been issued to defer the same till 30th September 2019. In view of the above,no GST under reverse charge basis is payable in respect of inward supplies , as per section 9 (4) .

Kindly note that Reverse charge on Freight Payments (Goods Transport Agency) , Advocate fees, Sitting fees to Directors , which are covered under Section 9(3) are not exempted and GST on these payments shall continue to be paid under Reverse Charge.

The relevant notification is reproduced below :-

GSTR 3B Monthly return to continue till March 2019

As per the latest Notification No 34/2018-Central Tax, the filing of Monthly Summary Return in GSTR 3B shall continue till the month of March 2019 and in view of the same, tax payment shall also be paid while filing the GSTR – 3B . The last date for filing the GSTR-3B is 20th of the succeeding month.

The relevant Notification is reproduced below :-

Allocation of GST Taxpayers between Centre & State (TN)

As you are aware, the GST is administered both by the State Governments & Central Governments. As per the decision taken in the GST Council, the Taxpayers will be allocated either to State Government (or) Central Government.

The Tamilnadu Government vide its Order No 1/2018 dtd 28/02/2018 has published the complete details of the allocation of GST taxpayers allocated to Centre and State Government (Tamilnadu)

The notification link is provided below. You can download the respective documents and search for your GSTN to know where your case has been allocated.

Click here for list of Taxpayers allocated to State Government (Tamilnadu) – (This document is 30 MB size maynot display correctly in mobiles, suggest to view in Desktop)

Click here for list of taxpayers allocated to Central Government

Source :-

Have you paid GST under wrong heads? Here is how you can claim the refund of the same..

The GST regime has brought many new concepts for making payment of appropriate GST dues. In the initial stages, it was confusing for most of the taxpayers to identify the correct head for the payment and in many instances, the taxes were remitted to inappropriate heads. For Example, the amount to be filled in SGST would have been filled in either CGST , IGST, Cess, Fees etc., This will be noticed by most of the tax payers only at the time of carrying out the set off of taxes, wherein they will notice that the amount was paid in inappropriate head.

The amount thus paid will lie in the Cash ledger of the taxpayers. The refund mechanism for the same was not operational in the GST portal till date. Now the GST portal has enabled those refund claims. Now you can file a refund application in the portal.

Follow the procedure as mentioned below to claim the refund of the excess amount lying in the Cash Ledger , in wrong accounts.

Step 1                                   :-             Visit the GST portal –

Step 2                                   :-             Go to Services Tab

Step 3                                   :-             Select Refund option

Step 4                                   :-             Select the “Application for Refund” from the sub menu

Step 5                                   :-             Select “Refund of Excess in Electronic Cash Ledger” from the

available options

Step 6                                   :-             Now the portal will display the “Balance available in Cash ledger”

under various heads

Step 7                                   :-             Now in the box below “Refund claimed (in INR)” , fill the relevant

head for which you want the refund

Step 8                                   :-             Select the Account number to which the refund to be credited.

Please note that the bank account number will be automatically

filled based on your Profile.

Step 9                                   :-             Save & Submit the form using either Digital Signature or OTP.

On submission, you will be allotted an ARN for the refund claim and the status of the same can be checked from the link “Track application Status”

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The Introduction of GST has reduced the compliance burden of the assessees who had registered with Excise/VAT/Service tax and the record maintenance requirement for these statutes were different. After introduction of GST, the requirement of maintenance of Accounts and records have been notified by the Act making it simpler for the tax payers to comply with the same. In this article we have tried to summarise the various requirements under GST with regard to Accounts and Records.

Who are required to maintain Accounts and records in GST?

As per Section 35 of the CGST Act, every registered person shall keep and maintain Accounts and records.

Where should the Accounts and records be maintained?

A true and correct account shall be maintained at the principal place of business, as mentioned in the certificate of registration.

What if there are more than one place in the Registration Certificate ?

In case, more than one place of business is mentioned in the Certificate of Registration, the accounts of each of the place of businesses shall be maintained at such places of business.

In what form the accounts be maintained?

The tax payer can maintain accounts and records either in Manual form or electronic form. However each volume of books of account maintained manually by the registered person shall be serially numbered

What are the accounts and records to be maintained ?

Every registered person shall maintain the following accounts and records :-

(a) accounts of stock in respect of goods received and supplied; and such account shall contain particulars of the opening balance, receipt, supply, goods lost, stolen, destroyed, written off or disposed of by way of gift or free samples and balance of stock including raw materials, finished goods, scrap and wastage thereof

(b) a separate account of advances received, paid and adjustments made thereto

(c) an account containing the details of tax payable, tax collected and paid, input tax, input tax credit claimed together with a register of tax invoice, credit note, debit note, delivery challan issued or received during any tax period

(d) names and complete addresses of suppliers from whom goods or services chargeable to tax under the Act, have been received

(e) names and complete addresses of the persons to whom supplies have been made

(f) the complete addresses of the premises where the goods are stored including goods stored during transit along with the particulars of the stock stored therein

(g) monthly production accounts showing the quantitative details of raw materials or services used in the manufacture and quantitative details of the goods so manufactured including the waste and by products thereof

(h) accounts showing the quantitative details of goods used in the provision of services, details of input services utilised and the services supplied

(i) separate accounts for works contract showing –

• the names and addresses of the persons on whose behalf the works contract is executed

• description, value and quantity (wherever applicable) of goods or services received for the execution of works contract

• description, value and quantity (wherever applicable) of goods or services utilized in the execution of works contract

• the details of payment received in respect of each works contract and

• the names and addresses of suppliers from whom he has received goods or services


Any entry in registers, accounts and documents shall not be erased, effaced or overwritten and all incorrect entries, other than those of clerical nature, shall be scored out under attestation and thereafter the correct entry shall be recorded


where the registers and other documents are maintained electronically, a log of every entry edited or deleted shall be maintained.


All accounts maintained together with all invoices, bills of supply, credit and debit notes, and delivery challans relating to stocks, deliveries, inward supply and outward supply shall be preserved for seventy two months (six years) from the due date of furnishing of annual return for the year pertaining to such accounts and records and shall be kept at every related place of business mentioned in the certificate of registration.


The following requirements have been prescribed for maintenance of records in electronic form.

• Proper electronic back-up of records

• Produce, on demand, the relevant records or documents, duly authenticated, in hard copy or in any electronically readable format

Click here to send your enquiries (or) use the form below to send your enquiries.


Movement of goods under GST

Under the present VAT Regime, different states follow different rules and forms for movement of goods within the respective states and also for Inter state movement of goods. The compliance requirements under the present VAT regime has many restrictions and different procedural formalities to be completed for movement of goods.

The movement of goods under the GST regime is expected to be less cumbersome and assessee friendly. The  CBEC has released electronic way bill rules prescribing rules and regulations for movement of goods.

The various aspects of e-way bill under GST regime are discussed below.

What is an e-way bill?

E-way bill is an electronic document created for movement of goods

When is a e-way bill mandatory?

When there is a movement of goods of value more than Rs. 50000 by a registered person , e way bill is mandatory. The movement of goods may be for supply of goods, return of goods or for supply from a unregistered person

How to generate a e way bill?

The registered supplier or the recipient In case of supply from unregistered person, can generate e way bill electronically through GSTN portal in Form INS-01.

What is the validity of the e way bill?

The eway bill , once generated will be valid for 1,3,5,10 or 15 days from the date of generation of the same , depending on the distance the goods have to be transported.

Can a e way bill once generated be cancelled?

When an e way bill is generated , but the goods are either not being transported or  the details as furnished in the generated bill are different, the e way bill can be generated within a period of 24 hours of generation of the e way bill.

What is the validity of the e way bill?

The validity of the e way bill is based on the distance

Distance                                                              Validity period (days)

Less than 100 kms                                            1

100 km or more less than 300 kms            3

300 km or more less than 500 kms            5

500 km or more less than 1000 kms          10

1000 kms or more                                            15

The commissioner may extend the validity period of the e way bill for certain categories of goods as may be specified.

Time limit for acceptance of e way bill

Once the details of the e way bill generated shall be made available to the recipient, if registered , on the common portal, who shall communicate his acceptance or rejection of the consignment covered by the e way bill, within 72 hours of the details being made available to him on the common portal.

What happens if the recipient doesnt confirm the acceptance within 72 hours?

If the same is not accepted or rejected by the recipient within 72 hours, it is deemed to be accepted the details as uploaded through e-way bill.

Send your queries/feedback below.

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