Eligible ITC Claimed as per Rule 36(4)

The Government is bringing many changes to the CGST Rules. One such change involves the insertion of Rule 36(4) in CGST Rules, 2017 with effect from 9th October 2019. This brings out restriction in claiming the Input Tax Credit (referred to as “ITC” ). This raises a lot of question about the ITC claim that the business owners want answers to.


Let us understand more about the modification made

rule-36-b rule-36-c rule-36-d rule-36-e rule-36-f

To understand better, here is an example

Eligible Inputs as per Accounts A 4,00,000 11,00,000
Eligible Inputs as reflected in GSTR 2A B 2,00,000 10,50,000
Eligible Inputs not in GSTR 2A C 2,00,000 50,000
Restriction as per Rule 36(4) D =2,00,000*10%= 20,000 =10,50,000*10%= 1,05,000 restricted to 50,000
Total ITC to be claimed in GSTR 3B B+D 2,20,000 11,00,000

Disclaimer:"The information contained herein is only for informational purpose and should not be considered for any particular instance or individual or entity. We have obtained information from publicly available sources, there can be no guarantee that such information is accurate as of the date it is received or it will continue to be accurate in future. No one should act on such information without obtaining professional advice after thorough examination of particular situation."

Prepared By

Chaitra V