Proposed Amendment in Sec: 16 vide Finance Bill, 2021

Section 16 – No Input Tax Credit (ITC) to be availed unless reflected in GSTR-2A / 2B

Section 16 (2) (aa) of the CGST Act is proposed to be inserted to provide that ITC on invoice or debit note should be availed only when such details are uploaded by supplier in GSTR-1. In nutshell, for availing ITC on inward supply; new condition is proposed to be inserted where invoice or debit note for which recipient wants to avail ITC must be auto-populated in Form GSTR-2A / GSTR-2B.

Rule 36(4) of CGST Rules, 2017, was introduced to put restriction on availment of ITC. The said Rule has been amended several times and after the insertion of this sub-clause in Section 16, the date wise impact on ITC restriction is tabulated as under:

Example: