Clarification relating to application of sub-rule (4) of rule 36 of the WBGST Rules, 2017 for the months of February, 2020 to August, 2020 - GST - States - TRADE CIRCULAR No. 09/2020

GOVERNMENT OF WEST BENGAL DIRECTORATE OF COMMERCIAL TAXES 14, BELIAGHATA ROAD, KOLKATA-700015 TRADE CIRCULAR No. 09/2020 ( Corresponding Central Circular No. 142/12/2020-GST ) DATED: 13.10.2020 Subject: Clarification relating to application of sub-rule (4) of rule 36 of the WBGST Rules, 2017 for the months of February, 2020 to August, 2020. Vide Trade Circular No. 43/2019, dated 18 th November, 2019, various issues relating to implementation of sub-rule (4) of rule 36 of the West Bengal Goods and Services Tax Rules, 2017 (hereinafter referred to as the WBGST 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 37 of the West Bengal Goods and Services Tax Act, 2017 (hereinafter referred to as the WBGST Act) were clarified. 2. Keeping the situation prevailing in view of measures taken to contain the spread of COVID-19 pandemic, vide notification No. 462-FT, dated 15.04.2020, it had been prescribed that the condition made under sub-rule (4) of rule 36 of the WBGST 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 Commissioner, in exercise of its powers conferred under section 168 of the WBGST Act hereby clarifies certain issues in succeeding paragraphs. 3.1 It is re-iterated that the clarifications issued earlier vide Trade Circular No. 43/2019, dated 18.11.2019 shall still remain applicable, except for the cumulative application as prescribed in proviso to sub-rule (4) of rule 36 of the WBGST 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 WBGST 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 WBGST 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 WBGST 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 WBGST 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 WBGST 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 subrule (4) of rule 36 of the WBGST 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) 6. Difficulty, if any, in implementation of this circular may please be brought to the notice of the Commissioner. 7. This Trade Circular shall be deemed to have come into force with effect from the 9th day of October, 2020. Sd/- (Devi Prasad Karanam) Commissioner, State Tax, West Bengal