Dear Professional Colleagues,

Background/ Issues

During the initial period of implementation of GST, during the financial years 2017-18 and 2018-19, in many cases, the suppliers failed to furnish the correct details of outward supplies in their FORM GSTR-1, which has led to certain deficiencies or discrepancies in FORM GSTR-2A of their recipients. However, the concerned recipients may have availed input tax credit on the said supplies in their returns in FORM GSTR-3B.

Also, FORM GSTR-2A could not be made available to taxpayers on the common portal during the initial stages of the implementation of GST.

Solution

Process of checking ITC

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:  

i) that he is in possession of a tax invoice;  

ii) that he has received the goods or services or both;

iii) that he has made payment for the amount towards the value of supply, along with tax payable thereon, to the supplier. 

(iv) In order to verify the condition of Section 16(2)(C), that tax on the said supply has been paid by the supplier, the following action may be taken by the proper officer:  

- In case, where the 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, 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.

-  In cases, where the above difference is upto Rs 5 lakh, the proper officer shall ask the claimant to produce a certificate from the concerned supplier itself.  

Notes

Clarifications given are applicable to the bonafide errors committed in reporting during FY 2017-18 and 2018- 19. Further, these guidelines are clarificatory in nature and may be applied as per the actual facts and circumstances of each case and shall not be used in the interpretation of the provisions of law.