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ITC 20% to be claimed for invoice not shown by supplier

Seetharaman Sir,
In Economic Times on 10th October, 2019, there was article that if one has to clain ITC, for invoice not shown by supplier in GSTR2A (if you can not see), then you can only claim 20% of ITC for that invoice which is not shown by supplier. They say that it is w.e.f. October 9, 2019. Is this true?

Thanks if you can guide me please.

It is true , but its not that you can claim 20 % ITC for that invoice not uploaded by supplier . It is 20% of the total ITC which have been uploaded by your suppliers .

For example - Your vendor has not uploaded invoice amounting to rs 100000 and GST Rate is 18% .. Your other suppliers have uploaded invoices amounting to Rs 2,00,000/- and rate is 18% .

You can claim normal credit of 36000( 18% of 200000) and provisional credit of 20 % of 36000 = 7200/- ( Total 36000+7200= 43200)
In normal case , you could have availed 36000+18000= 54000

Notification No. 49/2019 – Central Tax Dated: 9th October, 2019

Anita Madam,
Thanks for your reponse.
I have some queries. I will appreciate if you can guide me please.
I refer to your notification number 49/2019: 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.”.

In common man's language what I have understood is as follows:

1) W.E.F. July 1, 2017, those suppliers who have not filed invoices in GST return, though it is given to the buyer, the buyers can claim only 20% of ITC for any supplies from these suppliers from Sept. 2019 GSTR3B returns onwards for which he has submitted the invoices. Is the understanding correct?

2) Question is suppose, the supplier does not file old invoices of FY 2017-18 (due to whatever reasons), then for how many months the buyer has to keep taking 20% of the invoice value for supplies from these suppliers.(20% for 5 months to claim full ITC from these suppliers? ). - Please guide.

3) Why Buyer has to suffer (though he is having proper GST Invoice from the suppliers), because supplier has not filed the return for these invoices. Why Govt. can not penalise suppliers for their non-submission of invoices?


I give below some examples for further important clarifications:

Suppose I have suppliers A, B, C,D, E

Supplier A - has not filed 2 out of 10 invoices in the month of July 2018 and 1 out of 5 invoice for August 2019. He has filed all other invoices till now.
As a buyer, when I file my Sept. GSTR3B, will I be allowed to take 20% of ITC of 4 invoices of August 2019 from supplier A - Please clarify. Should I claim 20% each month from Sept. onwards till I recover full ITC, though it is delayed ITC credit to me?

Supplier B - has not filed 1 invoice in May 2019 as per GSTR2A, but he says he had given to CA for filing who has made some punching error. As a buyer, I have claimed ITC in my May GSTR3B return. Supplier does not know how to correct it and where it will be reflected after correction? - Will it appear in GSTR2A of May 2019 or month of correction, say October 2019.

Supplier C, D, E - are also suppliers with turnover less than Rs. 1.5 Cr. So they file quarterly GSTR1 return, so they will file July-Sept 2019 return by 31st Oct. So in GSTR2A, it will get reflected in November. So, I am unable to claim ITC for supplies from these suppliers and hence my cash outflow will increase a lot. - Please explain whether understanding is correct.
If yes, larger question is as to how small businesses can survive in such environment? Why there is no representation to the Govt. from big institutions like yours.


I will explain with the following example

Situation 1 Situation 2
1.GST ITC claimed 1000 1000
2.GST ITC reflected in 2A 800 950
3.GST ITC not reflected in 2A 200 50

4.20% Eligible on reflected in 2A 160 190
( 20% on serial no 2)

5. Ineligible and will be reduced in ITC 40 0
( Serail no 3 - 4)

1. Notification applicable w.e.f 01 Oct 2019 ( not w.e.f 01 July 2017).
2. No, it's not that supplies from THOSE SUPPLIERS who had not filed a return / uploaded bills – your provisional ITC restricted to 20 % of eligible credit. It means ITC on bills not uploaded will be restricted to 20 % of all the eligible ITC on invoiced uploaded by all the suppliers
3. I agree with you. Govt should not penalize buyers
4. In your example above
You have 5 suppliers and one of the suppliers not filed his return
You will get eligible ITC in respect of 4 suppliers and in respect of 5th supplier, you can claim provisional ITC 20% of your total eligible ITC ( arrived out of returns filed by your 4 suppliers )

Mr. Sundarajan is right.

Total ITC available in situation 1 is 800+ 20% of 800 = 960

and in situation B :- 950 + 20% of 950 - ( Rs 1000/- as ITC can not exceed from the amount claimed )

Thanks Ms Anita and Mr. Sunderrajan. That means it is not related to supplierwise. it is overall ITC claim.
This is w.e.f. 1st oct. 2019, so when I file GSTR3B for srpt. now, should I follow new rule for ITC or old rule?

Also I have another query. Me and my suppliers are having turnover below 1.5 Cr. so they are filing quarterly GSTr1 return.However we file GSTR3B on monthly basis. Now they will file GSTR1 in January 31, 2020, so for Oct-Dec quarter actual GSTR2A reflection will be in February 2020. So till that time, my claim for ITC will be almost NIL. How can anyone work like this? Cashflow is blocked. Can you tell me, why people are not bringing this to Govt. notice?

To my understanding , now the GST credit is flow from the list uploaded by us . But as per new notification as per list uploaded or the credit in GSTR 2 a + 20% of GSTR 2A which ever is low.

I also agree that if the above is implemented that GSTR Input credit from the supplier who are filing quarterly return will not come and cash flow will be affected.

But department is to clarify mode of implementation and solution for mismatch of monthly return and quarterly return

Thanks Mr. Sundararajan and Ms Anita.
What I observe in GSTR2A, that it shows Invoices submitted and also shows Invoices Not Submitted. What is the meaning of Invoices not submitted. (If it is not filed by supplier, how can portal have those details?)
Assuming we have to only consider GSTR2A submitted Invoices as the ones which are filed and NOT submitted as the non-filed invoices. But I have list of invoices from my suppliers, which is not appearing in GSTR2A (neither submitted nor non-submitted).
So how to calculate the claim of ITC?
Is it 120% of credit in GSTr2A for submitted invoices or ITC of non-submitted Invoices as per GSTR2A list, whichever is lower OR
It is 120% of credit in GSTr2A for submitted Invoices or ITC of non-submitted Invoices as per list of invoices available with me (not still appearing in GSTR2A list), whichever is lower.
If my understanding is flawed, please excuse me and guide me.

If your purchase invoices are not reflected in GSTR 2A , it means that the supplier has not filled GSTR1 or your GST RC was wrongly mentioned . Then you have to compare your list of supplier wise purchase with supplier wise purchase reflected in GSTR 2A and for the mismatch, you have to follow the concerned suppliers to file their GSTR 1.

You are eligible to take maximum of GST ITC as per GSTR 2 A + 20% OF GST 2A as per notification no 049. As informed ealier, we have to see how the government implement the same in due course.

I have a query regarding AOC4 and MGT7 filing. Clerk has kept some columns unfilled and column of revenue split with different HSN codes is not shown separately. He has shown 100% revenue in wrong HSN code. Financial statement attached is correct and there is no change.Without checking, he has submitted the form to MCA.
Can anyone guide me, as to how MCA will treat this? Will they declare it as faulty and ask us to fill afresh? Will there be any penalty? If yes of how much?

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