Rule 36(4) clarification issued by government for compliance September 2020

Circular No. 142/12/2020-GST dated 9^thOctober 2020

Subject: Clarification relating to application of sub-rule (4) of rule 36 of the CGST Rules, 2017 for the months of February, 2020 to August, 2020

It was clarified that the return in FORM GSTR-3B for the tax period September, 2020 shall be furnished with the cumulative adjustment of input tax credit forthe tax period – February, March, April, May, June, July and August, 2020. Summary of the Circular is mentioned below-

1. Taxpayers shall ascertain the details of invoices uploaded by their suppliers for the periods from February-August, 2020, till the due date of furnishing of the statement in FORM GSTR-1 for the month of September, 2020 as reflected in GSTR-2As.

2. Taxpayers shall reconcile the ITC availed in their FORM GSTR-3Bs for the period February, 2020 to August, 2020 with the details of invoices uploaded by their suppliers of the said months, till the due date of furnishing FORM GSTR-1 for the month of September, 2020.

3. The cumulative amount of ITC availed for the months from February, 2020 to August, 2020 in FORM GSTR-3B should not exceed 110% of the cumulative value of the eligible credit available in respect of invoices or debit notes the details of which have been uploaded by the suppliers, till the due date of furnishing of the statements in FORM GSTR-1 for the month of September, 2020.

4. Failure to reverse such excess availed ITC on account of cumulative application would be treated as availment of ineligible ITC during the month of September, 2020.

Below is mentioned the Table depicting the manner of cumulative reconciliation for the said months-

Notification No. 30/2020 –Central Tax dt. 3.4.2020 – Circular 142/12/2020-GST dated Oct 9, 2020

Here, the Excess amount for Rs.1030/- is to be reversed in Column Table 4(B)(2) of FORM GSTR-3B, for the month of September, 2020.

For the month of September-2020, the taxpayer shall avail the ITC as per below computation-

The Taxpayer shall avail Available ITC under Table 4(A)(5) of GSTR-3B September-2020.

A Taxpayer shall keep following points in mind while filing Return for the period September-2020:-

1. All adjustments from February’2020 to August’2020 need to be shown as reversal in Table 4(B)(2) of FORM GSTR-3B, for the month of September, 2020

2. ITC for September-2020 needs to be availed in Table 4(A)(5) of GSTR-3B September-2020 applying Rule 36(4) of CGST Rules, 2017

3. ITC for previous Financial Year 2019-20 which was left to be taken is to be availed in Table 4(A)(5) of GSTR-3B September-2020 since no ITC pertaining to previous Financial Year 2019-20 could be taken after filing of return of September-2020 beyond the due date.