What is Circular No. 142/12/2020 - GST about?

Circular No. 142/12/2020 - GST provides clarifications on the application of sub-rule (4) of rule 36 of the CGST Rules, 2017, specifically addressing issues related to input tax credit claims for the period of February 2020 to August 2020.

How does Circular No. 142/12/2020 - GST affect input tax credit for businesses?

Circular No. 142/12/2020 - GST outlines the conditions under which businesses can claim input tax credit, emphasizing the need for reconciled data between GSTR-1 and GSTR-3B to ensure compliance.

What are the key issues clarified in Circular No. 142/12/2020 - GST?

Key issues clarified include the eligibility criteria for claiming input tax credit, the timeline for filing returns, and the importance of ensuring that the input tax credit claimed does not exceed the limits set by the circular.

Who should refer to Circular No. 142/12/2020 - GST?

Businesses registered under GST, tax professionals, and accountants should refer to Circular No. 142/12/2020 - GST to understand the nuances of input tax credit claims during the specified period.

Are there any penalties associated with non-compliance as per Circular No. 142/12/2020 - GST?

Yes, non-compliance with the guidelines set forth in Circular No. 142/12/2020 - GST could lead to penalties, including denial of input tax credit and potential fines, depending on the severity of the violation.

How can businesses ensure compliance with Circular No. 142/12/2020 - GST?

Businesses can ensure compliance by maintaining accurate records, reconciling their input tax credit data regularly, and adhering to the timelines for filing returns as specified in the circular.

What is the significance of the period from February 2020 to August 2020 in Circular No. 142/12/2020 - GST?

This period is significant as it addresses the unique challenges faced by businesses during the COVID-19 pandemic, providing guidelines that facilitate smoother operations and compliance during these months.

Can the clarifications in Circular No. 142/12/2020 - GST be applied retrospectively?

The clarifications in Circular No. 142/12/2020 - GST are meant for the specified period and should be applied accordingly; however, businesses may assess their prior claims in light of the guidelines for future compliance.

How does Circular No. 142/12/2020 - GST relate to other GST regulations?

Circular No. 142/12/2020 - GST complements existing GST regulations by providing specific guidance on the implementation of input tax credit rules, ensuring consistency and clarity for taxpayers.

Where can I find more detailed information on Circular No. 142/12/2020 - GST?

More detailed information on Circular No. 142/12/2020 - GST can be found on the official GST portal or through notifications published by the Goods and Services Tax Council, which outlines the specifics and implications of the circular.

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Circular No. 142/12/2020 – GST

by Shakshi Bharti | Nov 29, 2023 | GST, 2020 Circulars, Circulars, Circulars CGST 2020 | 0 comments

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Important Keyword: Rule 36(4) CGST Rules 2017, F. No. CBIC/20/06/14/2020-GST, Circular No. 142/12/2020-GST, Circular No. 123/42/2019 – GST, notification No. 30/2020-CT, Section 37(1) CGST Act, Section 168(1) CGST Act.

Words: 1,054; Read time: 6 minutes.

Circular No. 142/12/2020 – GST: Clarification of issues relating to application of sub-rule (4) of rule 36 of the CGST Rules, 2017, cumulatively for the months of February, 2020 to August, 2020

To

The Pr. Chief Commissioners / Chief Commissioners / Principal Commissioners / Commissioners of Central Tax (All),
The Principal Director Generals / Director Generals (All)

Madam / Sir,

Subject: Clarification relating to application of sub-rule (4) of rule 36 of the CGST Rules, 2017 for the months of February, 2020 to August, 2020 – reg.

Vide Circular No. 123/42/2019 – GST dated 11^th November, 2019, various issues relating to implementation of sub-rule (4) of rule 36 of the Central Goods and Services Tax Rules, 2017 (hereinafter referred to as the CGST Rules) relating to availment of input tax credit (ITC) in respect of invoices or debit notes, the details of which have not been uploaded by the suppliers under sub-section (1) of section 37of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as the CGST Act) were clarified.

2. Keeping the situation prevailing in view of measures taken to contain the spread of COVID-19 pandemic, vide notification No. 30/2020-CT, dated 03.04.2020, it had been prescribed that the condition made under sub-rule (4) of rule 36 of the CGST Rules shall apply cumulatively for the tax period February, March, April, May, June, July and August, 2020 and that 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.

3. To ensure uniformity in the implementation of the said provisions across the field formations, the Board, in exercise of its powers conferred under section 168(1) of the CGST Act hereby clarifies certain issues in succeeding paragraphs.

3.1 It is re-iterated that the clarifications issued earlier vide Circular No. 123/42/2019 – GST dated 11.11.2019 shall still remain applicable, except for the cumulative application as prescribed in proviso to sub-rule (4) of rule 36 of the CGST Rules. Accordingly, all the taxpayers are advised to ascertain the details of invoices uploaded by their suppliers under sub- section (1) of section 37 of the CGST Act for the periods of February, March, April, May, June, July and August, 2020, till the due date of furnishing of the statement in FORM GSTR-1 for the month of September, 2020 as reflected in GSTR-2As.

3.2 Taxpayers shall reconcile the ITC availed in their FORM GSTR-3Bs for the period February, 2020 to August, 2020 with the details of invoices uploaded by their suppliers of the said months, till the due date of furnishing FORM GSTR-1 for the month of September, 2020. The cumulative amount of ITC availed for the said months in FORM GSTR-3B should not exceed 110% of the cumulative value 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 of the CGST Act, till the due date of furnishing of the statements in FORM GSTR-1 for the month of September, 2020.

3.3 It may be noted that availability of 110% of the cumulative value 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 of the CGST Act does not mean that the total credit can exceed the tax amount as reflected in the total invoices for the supplies received by the taxpayer i.e. the maximum credit available in terms of provisions of section 16 of the CGST Act.

3.4 The excess ITC availed arising out of reconciliation during this period, if any, shall be required to be reversed in Table 4(B)(2) of FORM GSTR-3B, for the month of September, 2020. Failure to reverse such excess availed ITC on account of cumulative application of sub-rule (4) of rule 36 of the CGST Rules would be treated as availment of ineligible ITC during the month of September, 2020.

4. The manner of cumulative reconciliation for the said months in terms of proviso to sub- rule (4) of rule 36 of the CGST Rules is explained by way of illustration, in a tabulated form, below.

Table I

Tax period	Eligible ITC as per the provisions of Chapter V of the CGST Act and the rules made thereunder, except rule 36(4)	ITC availed by the taxpayer (recipient) in GSTR- 3B of the respective months	Invoices on which ITC is eligible and uploaded by the suppliers till due date of FORM GSTR-1 for the tax period of September, 2020	Effect of cumulative application of rule 36(4) on availability of ITC.
Feb, 2020	300	300	270	Maximum eligible ITC in terms of rule 36 (4) is 2450 + [10% of 2450] =2695. Taxpayer had availed ITC of 2750. Therefore, ITC of 55 [2750-2695] would be required to be reversed as mentioned in para 3.4. above.
March, 2020	400	400	380
April, 2020	500	500	450
May, 2020	350	350	320
June, 2020	450	450	400
July, 2020	550	550	480
August, 2020	200	200	150
TOTAL	2750	2750	2450
ITC Reversal required to the extent of 55
September, 2020	500	385	350	10% Rule shall apply independently for September, 2020
In the FORM GSTR-3B for the month of September, 2020, the tax payer shall avail ITC of 385 under Table 4(A) and would reverse ITC of 55 under Table 4(B)(2)

5. It is requested that suitable trade notices may be issued to publicize the contents of this Circular. Hindi version will follow.

6. Difficulty, if any, in implementation of this circular may please be brought to the notice of the Board.

(Yogendra Garg)
Principal Commissioner (GST)
y.garg@nic.in

Frequently Asked Questions

What is Circular No. 142/12/2020 – GST about?

Circular No. 142/12/2020 – GST provides clarifications on the application of sub-rule (4) of rule 36 of the CGST Rules, 2017, specifically addressing issues related to input tax credit claims for the period of February 2020 to August 2020.
How does Circular No. 142/12/2020 – GST affect input tax credit for businesses?

Circular No. 142/12/2020 – GST outlines the conditions under which businesses can claim input tax credit, emphasizing the need for reconciled data between GSTR-1 and GSTR-3B to ensure compliance.
What are the key issues clarified in Circular No. 142/12/2020 – GST?

Key issues clarified include the eligibility criteria for claiming input tax credit, the timeline for filing returns, and the importance of ensuring that the input tax credit claimed does not exceed the limits set by the circular.
Who should refer to Circular No. 142/12/2020 – GST?

Businesses registered under GST, tax professionals, and accountants should refer to Circular No. 142/12/2020 – GST to understand the nuances of input tax credit claims during the specified period.
Are there any penalties associated with non-compliance as per Circular No. 142/12/2020 – GST?

Yes, non-compliance with the guidelines set forth in Circular No. 142/12/2020 – GST could lead to penalties, including denial of input tax credit and potential fines, depending on the severity of the violation.
How can businesses ensure compliance with Circular No. 142/12/2020 – GST?

Businesses can ensure compliance by maintaining accurate records, reconciling their input tax credit data regularly, and adhering to the timelines for filing returns as specified in the circular.
What is the significance of the period from February 2020 to August 2020 in Circular No. 142/12/2020 – GST?

This period is significant as it addresses the unique challenges faced by businesses during the COVID-19 pandemic, providing guidelines that facilitate smoother operations and compliance during these months.
Can the clarifications in Circular No. 142/12/2020 – GST be applied retrospectively?

The clarifications in Circular No. 142/12/2020 – GST are meant for the specified period and should be applied accordingly; however, businesses may assess their prior claims in light of the guidelines for future compliance.
How does Circular No. 142/12/2020 – GST relate to other GST regulations?

Circular No. 142/12/2020 – GST complements existing GST regulations by providing specific guidance on the implementation of input tax credit rules, ensuring consistency and clarity for taxpayers.
Where can I find more detailed information on Circular No. 142/12/2020 – GST?

More detailed information on Circular No. 142/12/2020 – GST can be found on the official GST portal or through notifications published by the Goods and Services Tax Council, which outlines the specifics and implications of the circular.