This circular provides clarification on the manner of availing Input Tax Credit (ITC) in terms of sub-rule (4) of rule 36 of the CGST Rules, 2017, which restricts ITC on invoices or debit notes not uploaded by suppliers in their FORM GSTR-1.

The circular clarifies that the restriction applies only to those invoices or debit notes whose details are required to be furnished by suppliers under section 37(1) but have not been uploaded. ITC relating to imports, reverse charge supplies, ISD credits, and similar documents not covered under section 37(1) is outside the scope of this restriction, subject to fulfillment of other eligibility conditions. The restriction applies only to ITC availed on or after 9 October 2019.

It is clarified that the restriction is not supplier-wise but is to be computed on a consolidated basis for all eligible invoices. The ITC in respect of invoices not uploaded by suppliers shall not exceed 20% of the eligible ITC reflected in FORM GSTR-2A as on the due date of filing of suppliers’ GSTR-1 for the relevant tax period. Since the restriction is not system-enforced, compliance is to be ensured by taxpayers on a self-assessment basis.

The circular also explains, with illustrations, how much ITC can be availed in FORM GSTR-3B where some invoices are missing in GSTR-2A. It further clarifies that the balance ITC may be availed in subsequent tax periods once suppliers upload the pending invoice details, subject to the prescribed limit. This guidance aims to ensure uniform and consistent implementation of rule 36(4) across field formations.