Clarification of issues relating to application of sub-rule (4) of rule 36 of the CGST Rules, 2017, cumulatively for the months of February, 2020 to August, 2020

Last updated: 10 October 2020

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This circular provides clarification on the application of sub-rule (4) of rule 36 of the CGST Rules, 2017, specifically for the period from February 2020 to August 2020. Due to the COVID-19 pandemic, taxpayers were allowed to cumulatively apply this rule for these months. The circular reiterates that previous clarifications remain applicable, except for the cumulative application aspect. Taxpayers must reconcile their Input Tax Credit (ITC) availed in GSTR-3B for these months with the invoices uploaded by their suppliers, ensuring the total ITC does not exceed 110% of the eligible credit. Any excess ITC availed must be reversed in the GSTR-3B for September 2020.

Circular No. 142/12/2020- GST F. No. CBIC/20/06/14/2020-GST Government of India Ministry of Finance Department of Revenue Central Board of Indirect Taxes and Customs GST Policy Wing New Delhi, the 9thOctober, 2020 To The Pr. Chief Commissioners / Chief Commissioners / Principal Commissioners/ Commissioners of Central Tax (All), The Principal Director Generals / Director Generals (All) Madam / Sir, Subject: Clarification relating to application of sub-rule (4) of rule 36 of

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FAQ :

This circular clarifies the application of sub-rule (4) of rule 36 of the CGST Rules, 2017, specifically for the cumulative period of February 2020 to August 2020.

The rule was applied cumulatively for the specified months due to the prevailing situation and measures taken to contain the spread of the COVID-19 pandemic.

The cumulative amount of ITC availed in GSTR-3B for February to August 2020 should not exceed 110% of the cumulative value of eligible credit available from invoices uploaded by suppliers.

Any excess ITC availed during this period must be reversed in Table 4(B)(2) of FORM GSTR-3B for the month of September 2020.

No, the 110% availability does not mean the total credit can exceed the tax amount reflected in the total invoices for supplies received by the taxpayer, as per section 16 of the CGST Act.

Reconciliation should be done with invoices uploaded by suppliers until the due date of furnishing FORM GSTR-1 for September 2020. Any excess ITC must be reversed in the GSTR-3B for September 2020.