ITC CLAIM 120% OF GSTR-2A

[SIVARAMA KUMAR]

With the introduction of rule 36(4) i happen to see in many forums that if your existing liability in 3B is say ₹ 10,000/- and eligible credit under 2A is 5000 . the eligible claim for the month would be 120% of 5000 (₹ 6000) can be adjusted and balance can be carried forward to next month.

My query is do i have to pay the excess in cash for the month over and above ₹ 6000/- if there exists an output liability of ₹ 7000/- because unless you setoff your entire liability GSTR 3B could not be filed. or does the portal will allow to submit the GSTR 3B return considering the available credit in GSTR 2A. Will it not be an additional burden to the taxpayers as their working capital is being continuously eroded by these new provisions . Earlier the adjustment mode was altered, giving first preference to IGST, till its erosion and now this new mechanism would still add fuel .

Genuine replies awaited.

AI Summary

Input tax credit cap restricts provisional ITC, requiring cash payment when credit is insufficient and pressures cash flow.
A ceiling on provisional input tax credit based on supplier-reported invoices limits the credit a recipient may set off against output liability; any shortfall must be discharged in cash to meet return-filing requirements. The provision is described as an anti-fraud measure to curb credit claims grounded on unverified invoices and places emphasis on supplier obligation to upload invoices timely, with recipients facing working-capital pressure until supplier reporting is regularised.