Published Thu, 23 Feb 2023 | Updated Fri, 31 Mar 2023
Circular provides clarification to deal with Difference in ITC in the following scenarios:
- supplier failed to file FORM GSTR-1 for a tax period but filed the return FORM GSTR-3B.
- supplier has filed FORM GSTR-1 as well as return in FORM GSTR-3B but has failed to report a particular supply in FORM GSTR-1.
- supplies were made to a registered person and invoice is issued but supplier has wrongly reported the said supply as B2C supply, instead of B2B supply, in his FORM GSTR-1.
- supplier has filed FORM GSTR-1 as well as return in FORM GSTR-3B but he has declared the supply with wrong GSTIN of the recipient in FORM GSTR-1.
The proper officer shall first seek the details from the registered person regarding all the invoices on which ITC has been availed by the registered person in his FORM GSTR 3B but which are not reflecting in his FORM GSTR 2A. He shall then ascertain fulfillment of the following conditions of Section 16 of CGST Act in respect of the input tax credit availed on such invoices by the said registered person:
- that he is in possession of a tax invoice or debit note issued by the supplier or such other tax paying documents;
- that he has received the goods or services or both;
- that he has made payment for the amount towards the value of supply, along with tax payable thereon, to the supplier.
In order to verify the condition of clause (c) of sub-section (2) of Section 16 of CGST Act i.e whether tax charged actually paid to government on the said supply by the supplier, the following action may be taken by the proper officer:
- In case, where difference between the ITC claimed in FORM GSTR-3B and that available in FORM GSTR-2A of the registered person in respect of a supplier for the said financial year exceeds Rs 5 lakh, the proper officer shall ask the registered person to produce a certificate for the concerned supplier from the Chartered Accountant (CA) or the Cost Accountant (CMA), certifying that supplies in respect of the said invoices of supplier have actually been made by the supplier to the said registered person and the tax on such supplies has been paid by the said supplier in his return in FORM GSTR-3B. Certificate issued by CA or CMA shall contain UDIN.
- In cases, where difference between the ITC claimed in FORM GSTR-3B and that available in FORM GSTR-2A of the registered person in respect of a supplier for the said financial year is upto Rs 5 lakh, the proper officer shall ask the claimant to produce a certificate from the concerned supplier to the effect that said supplies have actually been made by him to the said registered person and the tax on said supplies has been paid by the said supplier in his return in FORM GSTR-3B
It may be noted that for the period FY 2017-18, as per proviso to section 16(4) of CGST Act, the aforesaid relaxations shall not be applicable to the claim of ITC made in the FORM GSTR-3B return filed after the due date of furnishing return for the month of September, 2018 till the due date of furnishing return for March, 2019, if supplier had not furnished details of the said supply in his FORM GSTR-1 till the due date of furnishing FORM GSTR-1 for the month of March, 2019.