Circular 193

[VishnuPriya R]

As per Rule 36(4) for the period 01-01-2020 to 31-12-2020, allowed additional credit to the tune of 10% in excess of the that reported by the supplier in their FORM GSTR-1.

For FY 2020-21, the ITC availed in GSTR 3B is 110% of ITC available in GSTR 2A. However, still we need to provide certificates for the parties not reflected in GSTR 2A to the extent of that excess 10% as per Circular 183.

The wordings of circular 193 is as follows:-

'Similarly, for the period from 01.01.2020 to 31.12.2020, when rule 36(4) of CGST Rules allowed additional credit to the tune of 10% in excess of the that reported by the suppliers in their FORM GSTR-1 or IFF, the guidelines provided by Circular No. 183/15/2022-GST dated 27th December, 2022 shall be applicable, for verification of the condition of clause (c) of sub-section (2) of Section 16 of CGST Act for the said period, subject to the condition that availment of Input tax credit by the registered person in respect of invoices or debit notes, the details of which have not been furnished by the suppliers under sub-section (1) of section 37, in FORM GSTR-1 or using the IFF shall not exceed 10 per cent. of the eligible credit available in respect of invoices or debit notes the details of which have been furnished by the suppliers under sub-section (1) of section 37 in FORM GSTR-1 or using the IFF.'

My query is that for FY 2020-21, the taxpayer has availed ITC to the extent of 110% of ITC available in GSTR 2A as per Rule 36(4). Still the taxpayer has to provide certificates from the supplier for that excess of 10% or in case the taxpayer has availed more than 110% of ITC available in GSTR 2A, only in such case the taxpayer has to provide certificate for that excess of 110%.

[Ganeshan Kalyani]

Sir, the circular does not speaks about producing certificates from the supplier. 

[Raam Srinivasan Swaminathan Kalpathi]

The excess 10% and later 5% was only for availing ITC.  Nonetheless, during scrutiny or audit department always insist on certificates either from the supplier for supplies less than Rs.5 lakhs and from a CA for supplies exceeding Rs.5 lakhs.  Only upon production of the certificates ITC entitlement devolve on the RTP.  This has been my experience.  Thanks

[Shilpi Jain]

This circular requires getting a declaration of the 10% credit taken, though in my view this circular can be challenged.

This apart, even the said rule for the said period can be challenged for being ultra vires.

[Padmanathan KV]

The circular speaks about getting certificate to the extent of 10% in excess of that appearing in GSTR-2A. In other words, to the extent of remaining amount which is not available in GSTR-2A, no credit is available even if certificate is produced. This is the understanding derived from the Circular. However, as mentioned both Rule 36(4) as well as the Circular needs to be challenged. 

AI Summary

Input tax credit excess allowance requires supplier declarations and follows circular verification guidance; certification expectations vary in audits. For the 01.01.2020-31.12.2020 period, restricted excess input tax credit over supplier-filed details was permitted, and verification of entitlement for invoices not furnished by suppliers must follow existing circular guidance; availment of such credit shall not exceed the permitted excess share of eligible credit, and documentary or declaration-based checks apply as per prior guidance.