Rule 36(4) of the CGST Rules, 2017, contains provisions which impose restriction on availment of Input Tax Credit (ITC) which reads as follows
“(4) Input tax credit to be availed by a registered person in respect of invoices or debit notes, the details of which have not been uploaded by the suppliers under sub-section (1) of section 37, shall not exceed [10 per cent] of the eligible credit available in respect of invoices or debit notes the details of which have been uploaded by the suppliers under sub-section (1) of section 37.”
A proviso to the above rule has been added by Notification No. 30/2020 – Central Tax, Dated 3rd April, 2020 which reads as follows
“Provided that the said condition shall apply cumulatively for the period February,March, April, May, June, July and August, 2020 and the return in FORM GSTR-3B for the tax period September, 2020 shall be furnished with the cumulative adjustment of input tax credit for the said months in accordance with the condition above.”
Combined reading of the above provisions implies that ITC to be availed by a registered person shall not exceed 10% of the eligible credit available in the Form GSTR-2A. In terms of the amendment restriction has to be seen cumulatively for period February to August 2020.
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