Rule 36(4) ITC Restrictions to 10% Cap - due to COVID-19 issue - & Lockdown all over India , how can we take ITC Credit - Need guidance please.

[venkataraman swaminathan]

Dear Sir

Good Morning

As per the present situation of Lockdown all over India and as per the Press Release & as per Finance Minister's announcement , time limit / due date / for all the GST Returns are extended up to June 2020. In these circumstances for the month of March 2020 , purchases, the supplier / service providers /vendors will avail the due date extension and hence they may file their GSTR-1 returns for March 20 belatedly , not on or before 11.04.2020 (falls in the Lockdonw period) . Hence for our ITC Credit by 2A & GL reconcilation will affect huge quantum of Short fall of ITC credit . How can we handle this (Rule 36(4) cap 10%) for Utilization of the ITC . Is there any relaxation in Rule 36(4) . Request guidance on this for March 2020- ITC credit for GSTR-3B .

thanks/regards

v Swaminathan

AI Summary

Discussion on COVID-19's Impact on GST ITC Under Rule 36(4) and Extensions for Filing Deadlines A participant raised a query about the impact of COVID-19 on Input Tax Credit (ITC) under Rule 36(4) of the GST, specifically regarding the 10% cap and the lockdown's effect on filing deadlines. Responses highlighted that the government extended the GST return deadlines, allowing cumulative adjustments for February to August 2020 to be made in September 2020 returns. Experts debated the rule's validity, with some considering it ultra vires due to deferred matching provisions. Others advised that ITC claims could be based on accounting records, even if not reflected in the GSTR-2A report, due to compliance delays during the lockdown.