Notification No : 49(CT) dt 09.10.2019, Goods and Services Tax - GST

[Ragavan Vijayakumar]

Dear Export,

Refer : GST (CT) Notification no : 49 dt 09.10.2019

3. In the said rules, in rule 36, after sub-rule (3), the following sub-rule shall be inserted, namely:-

“(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.”.

Kindly explain with suitable example above said point.

Kind Regards

V.Ragavan

Posts / Replies

[KASTURI SETHI]

Dear Sh.Alkesh Jani Ji,

Yes. You are right. 20 % capping will not yield any viable results. Actually ITC facility should be dispensed with, especially, keeping in view a large number of fraudulently availed modvat credit/cenvat credit/ITC cases detected by the Department during the period from 1986 to 2019 (till date). ITC is a set back to revenue collection. It is not in the interest of the nation. It is legalised loss of revenue to the nation. There should be lowest rate of tax without ITC and no weightage should be given to the concept of cascading effect.

[Ganeshan Kalyani]

The option thought of by expert thar the input tax credit mechanism should be replaced with the reduced rate of output tax which means supplier has to just apply certain percentage on the taxable turnover and arrive at the tax payable and discharge the same to the government. The compliance would become very very simple. No complication. No need for 2A reconciliation.

[Mandar Sathe]

Is there any clarity on the following points:

1. RCM credit

2. ITC on Import of Goods.

3. ITC on Import of Services.

In all the above category the ITC will never be reflected in 2A.

Also the limit is 20% of Eligible ITC. Can I go on availing 20% every month for eg 1 invoice having ITC 100 Rs. I avail 20% of Eligible ITC on Month 1 and balance in subsequent months. thereby ensuring that I avail all the ITC at the end (even those not reflected in 2A and still complying the 20% criteria.