Claiming ITC from GSTR 2B December 2021 in GSTR 3B January 2022: Guidelines and Eligibility

As per the recent amendment in the Finance Act 2022, you are eligible to claim the Input Tax Credit (ITC) of the financial year 2021-22 in your GSTR 3B for the tax period January 2022. This updated section guides you through the process and criteria for claiming ITC from GSTR 2B December 2021 in GSTR 3B January 2022.

Release of Official Notification

According to the amendment, the Central Government has clarified and amended several sections of the Finance Act 2021, a significant update that affects the procedures for claiming ITC. The official notification was issued on December 22, 2021, marking a significant change for input tax credit (ITC) claimants in India.

Important Amendments

Two important amendments to the Central Goods and Services Tax Act 2017 came into effect on January 1, 2022, directly impacting the process of claiming ITC. These amendments have provided new insights into the eligibility criteria and procedural requirements for claiming ITC, including the format of tax invoices and the timely communication of details.

Amendment of Section 7: Definition of Scope of Supply

The amendment of Section 7 involves the insertion of a new clause 'aa' in the definition of 'scope of supply'. This new clause defines the activities or transactions by a person other than an individual to its members or constituents, or vice-versa, where the supply is made for cash or deferred payment or other valuable consideration. The explanation provided ensures that the supply of activities or transactions inter se is deemed to take place from one person to another, clarifying the procedural and legal standing.

Amendment of Section 16: Eligibility and Conditions for Taking ITC

The amendment to Section 16 further specifies the conditions for claiming ITC. Earlier, the criteria for claiming ITC were nearly rigid, requiring possession of a tax invoice or debit note from a registered supplier. The new clause inserts a requirement that the details of the invoice or debit note must be furnished by the supplier in the statement of outward supplies and communicated to the recipient.

Eligibility Criteria for Claiming ITC

When claiming ITC from GSTR 2B December 2021 in GSTR 3B January 2022, you must meet the following criteria:

For Monthly Supplier: If your supplier is filling GSTR 1 on a monthly basis and filed GSTR 3B for the tax period of December 2021 after January 11, 2022, you can claim ITC as GST systems will accept this. For Quarterly Supplier with QRPM: If you are availing the reverse charge mechanism (QRPM) and your supplier filed their self-availing invoice (IAIF) after January 13, 2022, you can still claim ITC in January 2022.

These changes align with the requirements and processes as of January 1, 2022, ensuring that businesses can manage their ITC claims more effectively.

Conclusion

This update is a significant milestone in the GST regime, simplifying the process for claiming ITC while providing clarity on the procedural requirements. Businesses should ensure they adhere to these guidelines to make the most of their ITC and optimize their tax planning accordingly.