CBIC clarifies difficulties relating to amended Section 16(4) of the CGST Act

Sr. No.

Issue

Clarification

1.

For the purpose of sec 16(4), whether to consider date of issuance of debit note, or date of issuance of underlying invoice in order to determine the financial year;

Further, whether ITC can be availed on debit notes issued prior to 01 January 2021 in line with the amendment to section 16(4) or it will be applicable for the debit notes issued after 01 January 2021.

It has been clarified that w.e.f. 01 January 2021, the issuance date of debit notes shall determine the relevant financial year;

Further, ITC on the debit notes issued after the 01 January 2021 will be eligible as per the amended provision of section 16(4) and for the debit notes raised before 01 January 2021. ITC applicability will be determined based on the provision of section 16(4) as it existed before the amendment.        

2.

Compulsion on carrying the physical copy of invoice issued by the supplier for moving the goods as prescribed u/r 48(4) of CGST Rules

It has been clarified that no physical copy of invoices is required in cases where invoice has been generated by the supplier in the manner prescribed u/r 48(4) of the CGST Rules and production of the QR code having an embedded IRN electronically, for verification by the proper officer, would suffice

3.

Applicability of the first proviso to sec 54(3) of CGST Act (which prohibits the refund of unutilized ITC) in the case of export of goods having NIL rate of export duty.

It has been clarified that, cases where there is no export duty and supplies are at NIL rate such transactions shall not be covered by the restriction imposed under the first proviso to sec 54(3) of the CGST Act.