Summary of Circular No. 123/42/2019-GST


Summary of Circular No. 123/42/2019-GST

Ahead of due date of GST-3B, CBIC has resolved queries on provisional credit @ 20% through Circular No. 123/42/2019-GST

Following is the list of clarifications issued:

  1. Restriction is not imposed through the common portal hence the taxpayer can avail credit on self-assessment basis for sub-rule (4) of rule 36
  2. Taxpayers can avail full ITC in respect of following
  • IGST paid on import,
  • documents issued under RCM,
  • credit received from ISD etc.

i.e. which are outside the ambit of sub-section (1) of section 37

  1. Restriction of 36(4) will be applicable only on the invoices / debit notes on which credit is availed after 09.10.2019
  2. 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. Hence restriction imposed is not supplier wise
  3. The cut-off date to compute the eligible ITC is due date of filing GSTR-1
  4. ITC that can be claimed for particular month would be 120% of eligible ITC or Total ITC as per invoices received, whichever is less
Case Credit as per Books Credit reflected in GSTR-2A Credit not reflected in GSTR-2A Provisional [email protected]% Amount eligible as per 36(4) Total eligible credit claimed Unavailed eligible credit
1 10 7 3 1.4 1.4 8.4 1.6
2 10 9 1 1.8 1 10 Nil
  1. The balance ITC that is left to be claimed would be eligible post reflection in GSTR-2A to the extent of 120%, provided total ITC claimed cannot exceed actual ITC

Hence, for case 1 unavailed credit can be claimed in succeeding tax periods only when respective invoices are uploaded by the supplier

Queries which remain unresolved

Reconciliation of eligible ITC and Total ITC is to be done on monthly basis or YTD Basis. Since, there will always be gap between the date of invoice booking by recipient and date of uploading invoices by supplier

Also, in case supplier filing returns on quarterly basis, purchaser will end up having low ITC Eligibility

Although the circular have provided clarification on major issues but still the ambiguity persist among the taxpayers minds

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