The CBIC vide Notification No. 39/2021–Central Tax dated December 21, 2021 notified the relevant amendment made vide Section 109 of the Finance Act, 2021 w.e.f. January 01, 2022 to insert sub-clause (aa) in Section 16(2) of the Central Goods and Services Tax Act, 2017 (“the CGST Act”) that provides an additional condition to claim Input Tax Credit (“ITC”) based on invoice or debit note can be availed only when details of such invoice/debit note have been furnished by the supplier in his outward supplies (GSTR-1) and such details have been communicated to the recipient of such invoice or debit note.
Accordingly, the CBIC has made changes in corresponding Rule of the Central Goods and Services Tax Rules, 2017 (“the CGST Rules”) vide below mentioned notification:
The CBIC vide Notification No. 40/2021 – Central Tax dated December 29, 2021 amended Rule 36(4) of the CGST Rules as under w.e.f. January 01, 2022:
“(4) No input tax credit shall be availed by a registered person in respect of invoices or debit notes the details of which are required to be furnished under sub-section (1) of section 37 unless,-
(a) the details of such invoices or debit notes have been furnished by the supplier in the statement of outward supplies in FORM GSTR-1 or using the invoice furnishing facility; and
(b) the details of such invoices or debit notes have been communicated to the registered person in FORM GSTR-2B under sub-rule (7) of rule 60.”
Hence, w.e.f. January 01, 2022, following conditions need to be satisfied by registered person under Section 16(2) of the CGST Act for availing GST ITC on inward supplies of goods or services or both:
The recipient is in possession of tax invoice or debit note issued by a supplier;
The details of the above-mentioned invoice or debit note have been furnished by the supplier in the statement of outward supplies in GSTR-01 or using invoice furnishing facility and such details have been communicated to the recipient in Form GSTR-2B under Rule 60(7) of the CGST Rules;
The recipient has received the goods or services or both;
The tax charged in respect of such supply has been actually paid to the Government by the supplier; and
The recipient has furnished the return under Section 39 of the CGST Act.
Vide above-mentioned amendment, the confusions in the mind of the taxpayers of whether to availment of ITC would be on the basis of GSTR-2A or 2B has been clarified.
The Notification can be accessed at: https://www.cbic.gov.in/resources//htdocs-cbec/gst/notfctn-40-central-tax-english-2021.pdf
CA Sarthak Agarwal has more than 9 years of experience in Indirect Taxation – GST, Service tax, Excise, Customs, VAT/CST, DGFT matters, etc.