The Central Board of Indirect Taxes and Customs (‘CBIC’) has recently issued a significant circular numbered 193/05/2023-GST on July 17, 2023, addressing the challenges related to Input Tax Credit (‘ITC’) discrepancies for the period between April 1, 2019, to December 31, 2021. This circular is an extension of Circular No. 183/15/2022-GST, which dealt with the same subject matter but for financial years (‘FY’) 2017-18 and 2018-19.
The circular focuses on Rule 36(4) of the Central Goods and Services Tax Rules, 2017 (‘CGST Rules’), which permits additional credit in Form GSTR-3B compared to Form GSTR-2A up to specific limits during various periods. It emphasizes that availing such additional credit is subject to the conditions specified in Section 16(2)(c) of the Central Goods and Services Tax Act, 2017 (‘CGST Act’), which includes the requirement for the supplier to have ‘actually paid’ the tax on the said supply.
Further, the guidelines provided in this circular apply to ongoing proceedings in scrutiny, audit, investigation, etc., for the period from April 1, 2019, to December 31, 2021, and not to concluded proceedings. The circular categorizes different periods within the specified timeline, with varying limits of additional credit allowed, and provides clarifications through illustrative examples to ensure uniformity in implementing the provisions of the law across field formations.
For the period from April 1, 2019, to October 8, 2019, Circular No. 183/15/2022-GST will be applicable in its entirety. For the period from October 9, 2019, to December 31, 2019, the rule allows for 20% additional credit, for January 1, 2020, to December 31, 2020, it is 10%, and for January 1, 2021, to December 31, 2021, it is 5%.
The CBIC also clarifies that Rule 36(4) of the CGST Rules was meant to be a facilitative measure, allowing ITC availed in cases where suppliers might have delayed furnishing details of outward supplies. However, availing ITC under this rule is contingent upon fulfilling the conditions stated in Section 16 of the CGST Act.
Taxpayers need to comprehend and adhere to these guidelines while dealing with ITC discrepancies during the specified period. Compliance with the prescribed rules is essential to protect taxpayer interests, maintain the integrity of the GST system, and prevent undue scrutiny and challenges during tax proceedings.
*Authored by Srishty Jaura, Advocate at Metalegal Advocates. The views expressed are entirely personal and do not constitute legal opinion. *
AUTHORED BY
More Insights
24-07-2026
10
min read
‘Shylockian’ Lending is ‘Squeezing of Blood’: NCLT Moves Beyond Debt & Default to Reject a Section 7 Application
In a rare departure from the conventional debt-and-default enquiry under section 7 of the IBC, the NCLT, Kochi Bench rejected the financial creditors' petition after characterizing the underlying arrangement as a ‘Shylockian system’ of lending. This court ruling discusses Shylockian lending and examines the strength of the Tribunal's focus on the economic substance of the transaction against established legal principles governing admission under section 7 of the IBC.
10-07-2026
7
min read
Faceless Reassessment after S. 147A: What the Supreme Court Did – and Did Not – Decide
The Supreme Court's decision in Tej Pratap Singh does not settle the JAO–FAO controversy. Following Parliament's retrospective insertion of s. 147A, it remands the issue to the High Courts for fresh consideration. Faceless reassessment was never merely about moving tax files from paper to portal; it fundamentally changed the statutory authority responsible for communicating with the taxpayer, examining the record, drafting the order and completing the assessment. The real question now is how far a retrospective legislative clarification can go.
22-06-2026
8
min read
Claim Admission is not Debt Acknowledgement: Supreme Court on RP’s Role & Limitation under the IBC
Can admission of a claim by a Resolution Professional extend limitation under section 18 of the Limitation Act? In Shankar Khandelwal v. Omkara Asset Reconstruction Pvt. Ltd., the Supreme Court answered this question in the negative, holding that claim admission during CIRP is merely a statutory claim-verification process and not an acknowledgement of debt. The ruling clarifies the RP’s non-adjudicatory role and reinforces important principles governing limitation under the IBC.