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As per the amended CGST Rules (likely to become effective in days to come), input tax credit to be availed by a registered person, the details of which have not been uploaded by the suppliers, shall not exceed 20 per cent of the eligible credit available in respect of invoices or debit notes uploaded by the suppliers. This means going forward, it will be mandatory for the buyers to match the ITC claimed with the details uploaded by the vendors.
The amendment has introduced another set of compliance on a monthly basis i.e. check GSTR 2A if the credit claimed doesn’t exceed GSTR 2A by 20% and also determine the credit which are ‘eligible’ out of the GSTR 2A before applying this 20% rule.
A proper reconciliation of GSTR- 2A with books will now be critical to claim ITC. As businesses will strive to reduce instances of non upload of invoices by sellers. They will have to reduce ineligible credit instances to within 20% of eligible credit .

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