Dated 29th December, 2022

vide notification No. 48/2022

Clarification to deal with difference in Input Tax Credit (ITC) availed in FORM GSTR-3B compared with the details in FORM GSTR-2A pertaining for FY 2017-18 and 2018-19.

The discrepancies between the amount of ITC availed by the registered persons in their returns in FORM GSTR-3B and the amount as available in their FORM GSTR-2A are being noticed by the tax officers
during proceedings such as scrutiny/ audit/ investigation etc. for the FY 2017-18 and 2018-19 due to such credit not flowing to FORM GSTR-2A of the said registered persons. Such discrepancies are representing ineligible ITC availed by the registered person as the registered person are eligible to avail ghe ITC based on the provision of sec 16 of CGST ACT read with rule 36 of CGST rules.

In order to ensure uniformity in the provisions, the CBIC has clarifies the following scenario:-

A) When supplier failed to file GSTR-1 but filed GSTR-3B, hence the same is not reflecting in GSTR-2A of the recipients.

B) When supplier filed both GSTR-1 & GSTR-3B but failed to report any specific transaction.

C) When B2B supplies are shown as B2C supplies by the Supplier in GSTR-1, Hence the same was not reflected in GSTR-2A of the recipient.

D) When supplier filed both GSTR-1 & GSTR-3B but declared the supply with wrong GSTIN of the recipient.

The above scenario will be treated by the Proper officer with the following steps:

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 and ascertain the fulfillment of all the condition for availment of ITC as mentioned in sec -16 of CGST Act along with the time period of claiming the ITC and also check whether any reversal of ITC is required to be made as per Sec 17 or 18.

2) Further, the proper officer will take the following action for verifying the provision of Sec 16(2) that tax on the said supply has been paid by the supplier or not:

i) where the difference between ITC claimed in GSTR-3B and available in GSTR-2A is exceeding ₹-5L, the officer may ask the supplier to produce a certificate from the CA or CMA, certifying that such supply has been actually made and Tax must had been paid against such supply.

ii) if the difference between ITC claimed in GSTR-3B and available in GSTR-2A is upto ₹-5L, the officer may ask the claimant to produce a certificate from the supplier giving effect as mentioned in point (i) above.

3) For FY 2017-18, The above mentioned benefit will not be available if claimant had GSTR-3B after the due date of filing such return of the month of September 2018 till the due date of the said return for the period March 2019. Further, the said will also not available if the supplier will not furnish such supplies in form GSTR-1 for the month of March 2019.

Kind Attention:- These instructions will apply only to the ongoing proceedings in scrutiny/audit/ investigation, etc. for FY 2017-18 and 2018-19 and not to the completed proceedings.

Circular No. 183/15/2022-GST dated 27.12.2022

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Twenty years of experience in tax practice. Specialist in structuring & planning and tax optimization under indirect tax. Lead eastern India indirect tax practice of Ernst & Young in past.