The 38th meeting of the GST Council met under the Chairmanship of the Union Minister for Finance & Corporate Affairs Smt. Nirmala Sitharaman has decided that, Form GSTR-2A shall be restricted to 10% instead of 20% of the eligible Input Tax Credit.
The Input tax credit to the recipient in respect of invoices or debit notes that are not reflected in his FORM GSTR-2A shall be restricted to 10 per cent of the eligible credit available in respect of invoices or debit notes reflected in his FORM GSTR-2A.
Earlier, the CBIC had issued a clarification on Restriction in availing of the input tax credit in terms of sub-rule (4) of rule 36 of CGST Rules, 2017 was 20 per cent.
The restriction imposed is not supplier wise. The credit available under sub-rule (4) of rule 36 is linked to total eligible credit from all suppliers against all supplies whose details have been uploaded by the suppliers. Further, the calculation would be based on only those invoices which are otherwise eligible for ITC. Accordingly, those invoices on which ITC is not available under any of the provision (say under sub-section (5) of section 17) would not be considered for calculating 20 per cent of the eligible credit available.
The GST Council also decided to check the menace of fake invoices, suitable action to be taken for blocking of fraudulently availed input tax credit in certain situations.
