Only ITC Reflecting in GSTR2B can be taken from 1st Jan 2022; 5% Provisional ITC Provisions Removed
The CBIC released an important Notification No. No. 39/2021–Central Tax dated on 21st December 2021 notifies the date from which provisions of Section 108, 109, and 113 to 122 of the said Act shall come into force. CBIC notifies Provisions of Section 108, 109, and 113 to 122 shall come into force from 1st Jan 2022. This means that Section 108, 109, and 113 to 122 shall be applicable from 1st Jan 2022.
As per Section 109 of the Finance Act, 2021, clause (aa) is inserted below section 16(2) (a) of the Act, further stipulating that input tax credit on invoice or debit note is available to a recipient only if the details of such invoice or debit note has been furnished by the supplier in the statement of outward supplies and such details have been communicated to the recipient of such invoice or debit note. U/s. 37 now suppliers have liability to furnish the details of outward suppliers through their returns. By this amendment, for availing by recipients also, the same become mandatory.
Previously CBIC inserted sub-rule (4) under Rule 36 of the CGST Rules, 2017. The rule states that the provisional tax credit (without invoices on GSTR-2B) can be claimed in the GSTR-3B to the extent of 5% of eligible reflected in the GSTR-2B.
With effect from 1st Jan 2021, the total that can be claimed in GSTR-3B is 105% of the eligible appearing in the GSTR-2B of a particular period. The circular 123/2019 clarifying the issues relating to the implementation of original was released on 11th November 2019.
However, it was 10% between 1st Jan 2020 and 31st Dec 2020 while was earlier restricted to 20% for the period from 9th Oct 2019 up to 31st Dec 2019.