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CMA Intermediate · Direct and Indirect Taxation · Input Tax Credit

Under the CGST Rules, 2017 as given, which of the following is a condition that must be met before a registered person avails input tax credit on an invoice whose details are required to be furnished by the supplier under section 37(1)?

Credit can be availed only when the supplier has furnished the invoice in FORM GSTR-1 and the credit appears in the recipient's FORM GSTR-2B. This is the current condition under rule 36(4). The older 5 per cent provisional cap and GSTR-2 acceptance no longer apply.

  1. AThe supplier must have paid the tax in cash and not through the credit ledger
  2. BThe details of the credit on the invoice must have been communicated to the recipient in FORM GSTR-2BCorrect
  3. CThe invoice value must not exceed 5 per cent of the credit already availed in that month
  4. DThe recipient must have accepted the invoice in FORM GSTR-2 after matching

Explanation

Rule 36(4) allows credit only if the supplier has furnished the invoice details in FORM GSTR-1 (or through the invoice furnishing facility) and the credit has been communicated to the recipient in FORM GSTR-2B. The 5 per cent cap was replaced by this condition from 1 January 2022. FORM GSTR-2 acceptance and the old matching rule 69 were omitted.

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