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Circular No. 193/05/2023-GST
File No. CBIC-20001/5/2023-GST
Government of India
Ministry of Finance
Department of Revenue
Central Board of Indirect Taxes and Customs
GST Policy Wing
*****
New Delhi, Dated the 17
th
July, 2023
To,
The Principal Chief Commissioners/Chief Commissioners/Principal Commissioners/
Commissioners of Central Tax (All)
The Principal Directors General/ Directors General (All)
Madam/Sir,
Subject: Clarification to deal with difference in Input Tax Credit (ITC) availed in FORM
GSTR-3B as compared to that detailed in FORM GSTR-2A for the period 01.04.2019 to
31.12.2021.
Attention is invited to Circular No. 183/15/2022-GST dated 27
th
December, 2022, vide
which clarification was issued for dealing with the difference in Input Tax Credit (ITC) availed
in FORM GSTR-3B as compared to that detailed in FORM GSTR-2A for FY 2017-18 and
2018-19, subject to certain terms and conditions.
2. Even though the availability of ITC was subjected to restrictions and conditions
specified in Section 16 of Central Goods and Services Tax Act, 2017 (hereinafter referred
to as “CGST Act”) from 1
st
July, 2017 itself, restrictions regarding availment of ITC by the
registered persons up to certain specified limit beyond the ITC available as per FORM GSTR-
2A were provided under rule 36(4) of Central Goods and Services Tax Rules, 2017 (hereinafter
referred to as “CGST Rules”) only with effect from 9
th
October 2019. W.e.f. 09.10.2019, the
said rule allowed availment of Input tax credit by a 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 invoice furnishing facility (IFF), to the extent
not exceeding 20 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
of CGST Act in FORM GSTR-1 or using the IFF. The said limit was brought down to 10%
w.e.f. 01.01.2020 and further reduced to 5% w.e.f. 01.01.2021. The said rule was intended to
allow availment of due credit in cases where the suppliers may have delayed in furnishing the
details of outward supplies. Further, w.e.f. 01.01.2022, consequent to insertion of clause (aa)
to sub-section (2) of section 16 of the CGST Act, ITC can be availed only up to the extent
communicated in FORM GSTR-2B.
3.1 As discussed above, rule 36(4) of CGST Rules allowed additional credit to the tune of
20%, 10% and 5%, as the case may be, during the period from 09.10.2019 to 31.12.2019,
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01.01.2020 to 31.12.2020 and 01.01.2021 to 31.12.2021 respectively, subject to certain terms
and conditions, in respect of invoices/supplies that were not reported by the concerned
suppliers in their FORM GSTR-1 or IFF, leading to discrepancies between the amount of ITC
availed by the registered persons in their returns in FORM GSTR-3B and the amount as
available in their FORM GSTR-2A. It may, however, be noted that such availment of input
tax credit was subject to the provisions of clause (c) of sub-section (2) of section 16 of the
CGST Act which provides that ITC cannot be availed unless tax on the said supply has been
paid by the supplier. In this context, it is mentioned that rule 36(4) of CGST Rules was a
facilitative measure and availment of ITC in accordance with rule 36(4) was subject to
fulfilment of conditions of section 16 of CGST Act including those of clause (c) of sub-section
(2) thereof regarding payment of tax by the supplier on the said supply.
3.2. Though the matter of dealing with difference in Input Tax Credit (ITC) availed in
FORM GSTR-3B as compared to that detailed in FORM GSTR-2A has been clarified for FY
2017-18 and 2018-19 vide Circular No. 183/15/2022-GST dated 27
th
December, 2022, various
representations have been received seeking clarification regarding the manner of dealing with
such discrepancies between the amount of ITC availed by the registered persons in their
FORM GSTR-3B and the amount as available in their FORM GSTR-2A during the period
from 01.04.2019 to 31.12.2021.
4. In order to ensure uniformity in the implementation of the provisions of the law across
the field formations, the Board, in exercise of its powers conferred under section 168(1) of the
CGST Act, hereby clarifies as follows:
(i) Since rule 36(4) came into effect from 09.10.2019 only, the guidelines provided by
Circular No. 183/15/2022-GST dated 27
th
December, 2022 shall be applicable, in toto, for the
period from 01.04.2019 to 08.10.2019.
(ii) In respect of period from 09.10.2019 to 31.12.2019, rule 36(4) of CGST Rules
permitted availment of Input tax credit by a 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 IFF to the extent not exceeding 20 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 IFF.
Accordingly, the guidelines provided by Circular No. 183/15/2022-GST dated 27
th
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 IFF shall not exceed 20 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 IFF. This is clarified through an illustration below:
Illustration:
Consider a case where the total amount of ITC available as per FORM GSTR-2A of
the registered person was Rs. 3,00,000, whereas, the amount of ITC availed in FORM GSTR-
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3B by the said registered person during the corresponding tax period was Rs. 5,00,000.
However, as per rule 36(4) of CGST Rules as applicable during the said period, the said
registered person was not allowed to avail ITC in excess of an amount of Rs 3,00,000*1.2 =
Rs.3,60,000.
In the above case, the ITC of Rs 1,40,000 which has been availed in excess of Rs. 3,60,000
shall not be admissible as per rule 36(4) of CGST Rules as applicable during the said period
even if the requisite certificate as prescribed in Circular No. 183/15/2022-GST dated
27.12.2022 is submitted by the registered person. Therefore, ITC availed in FORM GSTR-3B
in excess of that available in FORM GSTR-2A up to an amount of Rs 60,000 only (i.e.
3,60,000-3,00,000) can be allowed subject to production of the requisite certificates as per
Circular No. 183/15/2022-GST dated 27.12.2022.
(iii) 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 27
th
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.
(iv) Further, for the period from 01.01.2021 to 31.12.2021, when rule 36(4) of CGST Rules
allowed additional credit to the tune of 5% in excess of that reported by the suppliers in their
FORM GSTR-1 or IFF, the guidelines provided by Circular No. 183/15/2022-GST dated 27
th
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 5 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.
5. It is further clarified that consequent to insertion of clause (aa) to sub-section (2) of
section 16 of the CGST Act and amendment of rule 36(4) of CGST Rules w.e.f. 01.01.2022,
no ITC shall be allowed for the period 01.01.2022 onwards in respect of a supply unless the
same is reported by his suppliers in their FORM GSTR-1 or using IFF and is communicated
to the said registered person in FORM GSTR-2B.
6. Further, it may be noted that proviso to rule 36(4) of CGST Rules was inserted vide
Notification No. 30/2020-CT dated 03.04.2020 to provide that the condition of rule 36(4) shall
be applicable cumulatively for the period February to August, 2020 and ITC shall be adjusted
on cumulative basis for the said months in the return for the tax period of September 2020.
Similarly, second proviso to rule 36(4) of CGST Rules was substituted vide Notification No.
27/2021-CT dated 01.06.2021 to provide that the condition of rule 36(4) shall be applicable
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cumulatively for the period April to June, 2021 and ITC shall be adjusted on cumulative basis
for the said months in the return for the tax period of June 2021. The same may be taken into
consideration while determining the amount of ITC eligibility for the said tax periods.
7. It may also be noted that these guidelines are clarificatory in nature and may be applied
as per the actual facts and circumstances of each case and shall not be used in the interpretation
of the provisions of law.
8. These instructions will apply only to the ongoing proceedings in scrutiny/ audit/
investigation, etc. for the period 01.04.2019 to 31.12.2021 and not to the completed
proceedings. However, these instructions will apply in those cases during the period
01.04.2019 to 31.12.2021 where any adjudication or appeal proceedings are still pending.
9. Difficulty, if any, in the implementation of the above instructions may please be brought
to the notice of the Board. Hindi version would follow.
Sanjay Mangal
Principal Commissioner (GST)
