CBIC Clarifies on Dealing with ITC Differences Between GSTR-3B & 2A

The Central Board of Indirect Taxes and Customs (CBIC) has recently issued a series of circulars to clarify various issues on Goods and Services Tax (GST). Among those, one was issued to clarify how to deal with the Input Tax Credit (ITC) difference between GSTR-3B & 2A for FY 2017-18 & 2018-19.

CBIC stated that GSTR-2A could not be made available in the portal during the initial stages of GST implementation. Also, they implemented provisional ITC rules w.e.f 9th October 2019 only. Hence, CBIC issued circular no: 183/15/2022-GST to clarify the taxpayers and tax authorities on dealing with differences in ITC claimed in GSTR-3B compared with GSTR-2A for the FY 2017-28 & 2018-19.

The circular states that only the following scenarios are covered in the circular:

  1. When a supplier not filed GSTR-1 but filed GSTR-3B, due to which the invoices were not reflected in GSTR-2A. 
  2. When the supplier filed both GSTR-1 & 3B but failed to report an invoice in GSTR-1, the same was not reflected in GSTR-2.
  3. When the supplier has wrongly reported an invoice as B2C instead of B2B in GSTR-1, due to which that invoice was not reflected in GSTR-2A of the recipient.
  4. When the supplier has filed both GSTR-1 & 3B but has issued invoices with the wrong GSTIN of the recipient.

Accordingly, the GST officer shall follow the following procedure to verify the ITC difference related to FY 2017-18& 2018-19:

  1. The officer shall seek all the invoices due to which ITC differences arose between GSTR-3B and 2A.
  2. Then the officer shall then ascertain fulfilment of the below conditions under Section 16 of the CGST Act in respect of the ITC availed:
  • The taxpayer has a tax invoice or debit note.
  • The taxpayer has received the goods or services or both.
  • Also, he has made payment for supply, along with GST.

When the difference between ITC claimed in GSTR-3B and ITC available in GSTR-2A from a supplier for a financial year exceeds Rs 5 lakh, the officer shall seek the recipient to produce a CA/CMA certificate for the supplier. The certificate shall state that invoices which ITC claimed were genuine and actually supplied have been made.

However, when the ITC difference is less than Rs 5 lakh, the office shall seek the recipient to produce a certificate from the concerned supplier stating that he has made the supplies.

Further, the Board has directed that the said procedure applies only to the ongoing proceedings for FY 2017-18 & 2018-19. Also, this procedure applies to pending adjudications or appeal proceedings related to FY 2017-18 & 2018-19.

For any clarifications/feedback on the topic, please contact the writer at dvsr.anjaneyulu@clear.in

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