The division bench of the Gujarat High Court has issued notices to Centre and the State Government on limiting the input tax credit to assessees in case the details have not been uploaded by the supplier.
Society of Tax Analysis and Research has moved to High Court through the Counsel Advocate Avinash Poddar.
Recently 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.
The said sub-rule provides a restriction in availing of input tax credit (ITC) in respect of invoices or debit notes, the details of which have not been uploaded by the suppliers under sub-section (1) of section 37of the Central Goods and Services Tax Act, 2017.
This section has been challenged in the High Court of Gujarat. After the first hearing, the Court issued notices to five respondents, including the GST Council, the CBIC and the Goods and Services Tax Network (GSTN), and fixed December 18 as the next date of hearing.
The CBIC had clarified that, 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 amount of input tax credit in respect of the invoices/debit notes whose details have not been uploaded by the suppliers shall not exceed 20% of the eligible input tax credit available to the recipient in respect of invoices or debit notes the details of which have been uploaded by the suppliers under subsection (1) of section 37 as on the due date of filing of the returns in FORM GSTR-1 of the suppliers for the said tax period. The taxpayer may have to ascertain the same from his auto-populated FORM GSTR-2A as available on the due date of filing of FORM GSTR-1 under sub-section (1) of section 37.
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