CBIC notifies certain restrictions in claiming input tax credit

The CBIC has recently notified certain changes related to claiming input tax credit (ITC). Please find below the key changes notified:

 

1. Restriction on claiming ITC (amendment to Rule 36(4) effective from 1 January 2021): A registered person can claim ITC in respect of invoices or debit notes not reflected in Form GSTR-01 only to the extent of 5% (instead of 10% earlier) of total eligible credit as per the details furnished by the supplier in Form GSTR-01.

 

2. Restriction on use of amount available in the electronic credit ledger (new Rule 86B inserted effective from 1 January 2021): The new rule provides that the registered person shall not use the amount available in electronic credit ledger to discharge his liability towards output tax in excess of 99% of such tax liability, in cases where the value of taxable supply other than exempt supply and zero-rated supply, in a month exceeds INR 50 lakh.

 

Filing of details of outward supplies (Form GSTR-1) to be blocked in certain cases