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CBIC clarifies on 'confusing' GST input tax credit rule
CBIC clarifies on 'confusing' GST input tax credit rule

New Delhi, Nov 12 (TIWN) In a relief to taxpayers, the Central Board of Indirect Tax and Customs has clarified that a new rule announced last month, limiting input tax credit (ITC) claims to 20 per cent of the eligible amount where invoice matching has not been done and uploaded by the suppliers, would not be applicable in respect of the IGST paid on imports and GST paid under the reverse charge mechanism.

The new rule, announced by CBIC on October 9, limited the scope of input tax credit in respect of invoices or debit notes, the details of which have not been uploaded by the suppliers to 20 per cent of the eligible amount. So, if ITC claim of say Rs 10 lakh was being claimed but documents supporting only Rs 6 lakh were uploaded, the total ITC applicable remained RS 6 lakh plus 20 per cent of Rs 6 lakh ie Rs 1.2 lakh (total Rs 7.2 lakh).  The October 9 notification caused a lot of confusion over the method of calculating this 20 per cent amount, the cut-off date and also whether it was to be calculated supplier-wise or on a consolidated basis.

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