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ITC Rule 36(4) Head Wise or Total ITC

18 February 2020

In Rule 36(4), when we check the restriction of 10%, it is to be compared individually 10% head wise(IGST, CGST, SGST) or directly compare with Total ITC ?

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14 Replies

Deepak Gupta (CA Student) (15922 Points)
Replied 18 February 2020

The credit available under sub-rule (4) of rule 36 is linked to total eligible credit from all suppliers against all supplies whose details have been uploaded by the suppliers.

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RAJA P M ("Do the Right Thing...!!!") (128096 Points)
Replied 18 February 2020

Yes... It's head wise.

Yash Morakhia (107 Points)
Replied 18 February 2020

Ok thankyou so much.

Pankaj Rawat (GST Practitioner) (55052 Points)
Replied 19 February 2020

No it's not head wise , need to be chk consolidated

RAJA P M ("Do the Right Thing...!!!") (128096 Points)
Replied 19 February 2020

No... It's headwise only. Not for consolidated... Also no way for consolidated...

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Yash Morakhia (107 Points)
Replied 25 February 2020

It is nowhere mentioned in the law that it is Act wise or consolidated so we can interpret it from both the sides?

RAJA P M ("Do the Right Thing...!!!") (128096 Points)
Replied 25 February 2020

Originally posted by : Yash Morakhia
	It is nowhere mentioned in the law that it is Act wise or consolidated so we can interpret it from both the sides?

May be or Not...

But.,

As per my view it's head wise....

Yash Morakhia (107 Points)
Replied 25 February 2020

Thanks👍

RAJA P M ("Do the Right Thing...!!!") (128096 Points)
Replied 25 February 2020

For Example :

I have ITC Rs. 3 lakhs as per my books (Each 1 lakh in CGST, SGST & IGST). In GSTR2A available as below

CGST - 95000, SGST - 95000 & IGST - No ITC...

Now.,

What Can I do as 10% rule...???

How can I file My GSTR-3B return...???

Yash Morakhia (107 Points)
Replied 25 February 2020

So in your above example if we consider Head wise, then for CGST and SGST we can claim 95000+10%(subject to ceiling) i.e Rs 1 lakh each and you wont be able to claim under IGST.

However, if we go on consolidated basis, you can claim Total ITC of 209000( 190000 + 10%). Still you wont get credit of Balance 91000. Thats the issue with this rule.

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RAJA P M ("Do the Right Thing...!!!") (128096 Points)
Replied 25 February 2020

Consolidated...?!
But, No ITC of IGST in GSTR 2A...! Then no way for calculate 10%...

Yash Morakhia (107 Points)
Replied 25 February 2020

Yes, that's what I said. if we compare head wise then won't be able to take credit

RAJA P M ("Do the Right Thing...!!!") (128096 Points)
Replied 25 February 2020

No bro... ITC can't be taken also calculating consolidated. Bcoz, there is zero...

Yash Morakhia (107 Points)
Replied 25 February 2020

I think it can be taken if we compare total ITC(and not head wise) because total ITC reflecting is 190000 and thus we can take Total ITC of 190k + 10% in 3B thats what I think.