Summary on Section 16(2) (aa) – ITC Cannot be Availed Beyond GSTR-2A/2B
As per section 16(2) (aa) of CGST Act inserted vide Section 109 of Finance Act, 2021, w.e.f. the date which is yet to be notified, the registered person shall not be entitled to avail input tax credit, unless the details of the invoice or debit note have been furnished by the supplier in the statement of outward supplies which is GSTR-1, and such details have been communicated to the recipient of such invoice or debit note in the manner specified under section 37 of CGST Act i.e. in GSTR-2A and GSTR-2B of the beneficiary for that matter.
So, it is being stated that the registered person can avail ITC only when the details regarding outward supplies are made in the statement pertaining to such outward supplies and the details of this have been communicated to the registered person in the manner which is specified under section 37 of the GST Act.
Section 37 of the GST Act, states that,
every person who is a registered under GST Act, other than an ISD or the Input Service Distributor or a non-resident taxable person or a person paying tax under the relevant section 10 or section 51 or section 52 of the GST Act shall furnish, in an electronic format, in such form and manner as may be specified, the details of outward sales of goods or services or both effected during a tax period which is falling on or before the 10th day of the month that is over or succeeding the said tax period, and such details shall be communicated to the beneficiary of the said sales within such time and in such manner as may be specified.
Further Rule 59(6) of the CGST Rules, after the amendment, states that,
Notwithstanding anything contained in this rule, –
(a) a person who is registered under GST shall not be allowed to provide any of the details of outward sales made of goods or services or both under section 37 in Form GSTR 1, if he has not filed the return in Form GSTR 3B for the month prior to the current month;
(b) a person who is registered with the GST Act, required to file a return for every quarter under the proviso relating to section 39(1), shall not be allowed to provide any of the details of outward supplies of goods or services or both under section 37 in the Formnamely, GSTR 1 or using the invoice furnishing facility (IFF), provided that he has not filed the return in FORM GSTR 3B for the tax period prior to the this.
Rule 59 also states that,
The details of outward sales provided by the distributor shall be made available in an electronic format to the personsconcerned and who are registered with the GST Law or the beneficiary in Part A of Form GSTR-2A, in Form GSTR-4A, and in Form GSTR-6A through the common online portal after the date for filing of Form GSTR-1 is due.
Hence, we can now conclude that in the light of the new section 16(2) (aa), the ITC of the GST paid shall be made available to the recipient of this only when such details have been provided or furnished by the concerned distributor or the supplier in Outward supplies and the details of the same have been communicated to the beneficiary or the recipient of such invoice or debit note in the manner specified under the GST Act and Rules.