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Clarifications in respect of certain GST related issues by CBIC

The Circular dated 20th September 2021 by the Central Board of Indirect Taxes and Customs (CBIC) under Section 168(1) of the Central Goods and Services Tax Act, 2017 (CGST Act) laid down clarifications in respect of certain GST related issues. The Circular was in response to the various representations being made by taxpayers and other stakeholders.

The clarifications put forth by CBIC are: -

1. The calculation of financial year for the purpose of Section 16, CGST Act which deals with Input Tax credit (ITC), in case of debit notes will be calculated from the date of issuance of debit note and not from the date of underlying invoice w.e.f 1st January 2021.

2. The availment of ITC on debit notes issued either prior to or after 1st January 2021 will be governed by the amended provision of section 16(4), CGST Act.

3. Any ITC availed prior to 1st January,2021, in respect of debit notes, shall be governed under provisions of section 16(4), CGST Act as it existed before the said amendment on 1st January 2021.

4. Availment of ITC on debit notes in respect of amended provision shall be applicable from 1st January 2021.

5. Physical copy of invoice is not compulsory during movement of goods in cases where suppliers have issued invoices in the manner prescribed under Rule 48 (4) of the CGST Rules, 2017.

6. The restriction imposed by Section 54(3), CGST Act from availment of refund of accumulated ITC is only on those goods which are subjected to export duty i.e., on which some export duty has to be paid at the time of export.


[1] https://www.cbic.gov.in/resources//htdocs-cbec/gst/Circular%20No.%20160_14_2021_GST.pdf