During the initial period of implementation of GST, i.e., FY 2017-18 and 2018-19, in many cases, the suppliers failed to furnish the correct details of outward supplies in their Form GSTR-1 for such financial years, which led to certain deficiencies or discrepancies in Form GSTR-2A of their recipients. Moreover, the concerned recipients might have availed input tax credit (ITC) on the said supplies in their returns in Form GSTR-3B. The Tax Officers are noticing such discrepancies during the proceedings undertaken by them since the credit was not flowing to Form GSTR-2A of the said registered persons. Such discrepancies are considered as ineligible ITC availed by the registered persons and are being flagged seeking explanation from the registered persons for such discrepancies and/or for reversal of such ineligible ITC.
However, the taxpayers have cited the following difficulties faced by them in respect of discrepancies so noticed:
- Form GSTR-2A could not be made available to the taxpayers on the common portal during the initial stages of implementation of GST
- Restrictions regarding availment of ITC by the registered persons up to certain specified limit beyond the ITC available as per Form GSTR-2A were provided under rule 36(4) (Documentary requirements and conditions for claiming input tax credit) of Central Goods and Services Tax Rules, 2017 only with effect from 9th October 2019
- But, the availability of ITC was subjected to restrictions and conditions specified in Section 16 (Eligibility and conditions for taking input tax credit) of Central Goods and Services Tax Act, 2017 from 1st July, 2017 itself
In view of the various representations so received from the trade as well as the tax authorities, seeking clarification regarding the manner of dealing with such discrepancies between the amount of ITC availed by the registered persons in their Form GSTR-3B and the amount as available in their Form GSTR-2A during FY 2017-18 and FY 2018-19, the Central Board of Indirect Taxes and Customs (CBIC) has issued clarifications to this effect on December 27, 2022.
|1.||The supplier has failed to file Form GSTR-1 for a tax period but has filed Form GSTR-3B for the said tax period, due to which the supplies made in the said tax period is not getting reflected in Form GSTR-2A of the recipients||The difference in ITC claimed by the registered person in Form GSTR-3B and that available in Form GSTR-2A may be handled as per the procedure laid below the table.|
|2.||The supplier has filed Form GSTR-1 as well as Form GSTR-3B for a tax period, but has failed to report a particular supply in Form GSTR-1, due to which the said supply is not getting reflected in Form GSTR-2A of the recipient|
|3.||The supplier has wrongly reported the supplies made to registered persons with a Tax invoice as B2C supply, instead of B2B supply, in his Form GSTR-1, due to which the said supply is not getting reflected in Form GSTR-2A of the said registered person|
|4.||The supplier has filed Form GSTR-1 as well as Form GSTR-3B for a tax period, but he has declared the supply with wrong GSTIN of the recipient in Form GSTR-1||
Procedure for Handling Differences in ITC Claimed:
The Proper Officer shall follow the below stated procedure for handling the differences in ITC claimed by the registered person in Form GSTR-3B and that available in Form GSTR-2A:
|S.No.||Steps to be Followed||Detailed Information|
|1.||Ascertain the condition fulfillment under Section 16 of the CGST Act||
|2.||Reversal of Input Tax Credit (ITC), if required||Check the following:
|3.||Verifying the Payment of tax so charged on supplies to the Government||
- In terms of the provisions of proviso to Section 16(4) of the CGST Act, for the period of FY 2017-18, the aforesaid relaxations shall not be applicable to the claim of ITC made in Form GSTR-3B which was 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 the supplier had not furnished the 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.
- The clarifications given in the CBIC Circular (Ref: 183/15/2022-GST, dated: 27.12.2022) are case specific and are applicable to the bonafide errors committed in reporting during the FY 2017-18 and 2018-19.
- These instructions will apply only to the ongoing proceedings in scrutiny/audit/ investigation, etc. for the FY 2017-18 and 2018-19 and not to the completed proceedings but, will apply in those cases for FY 2017-18 and 2018-19 where any adjudication or appeal proceedings are still pending.