ITC Mismatch as per GSTR-2A and GSTR-3B
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Input tax credit mismatch as per GSTR-2A and GSTR-3B
Top 5 High Court judgments of 2024 related with GST mismatch as per GSTR-2A and GSTR-3B,
- In the Matter of NRB Bearings Ltd. vs Commissioner of State Tax (14-Feb-2024) Bombay High Court allowed the rectification of clerical error in GSTR-1 to restore Input Tax Credit, prioritizing fairness over technicalities.
- In the Matter of Anvita Associates vs Union of India (15-Jan-2024) Bombay High Court ruled that if sales invoices were not disclosed in Form GSTR-1, the assessee should rectify it with goods and services tax Authorities.
- In the Matter of Railroad Logistics India Pvt. Ltd. vs Union of India (15-Jan-2024) Bombay High Court: Where assessee made an inadvertent error in submitting goods and services tax number of Mahindra & Mahindra (Rajasthan) in its form GSTR-1 instead of correct goods and services tax number of Mahindra & Mahindra (Orissa), said dispute was not a case where any loss of revenue would be caused to government as already tax had been paid, therefore rectification was to be permitted to assessee.
- In the Matter of Jaykrishnan K.S. vs Union of India (03-Jan-2024) Kerala High Court: Where assessee wrongly claimed Integrated Goods and Services Tax credit under Central Goods and services tax and State goods and services tax in GSTR-3B, GST Authority was directed to consider assessee’s rectification application expeditiously.
- In the Matter Divya S.R. vs Union of India (03-Jan-2024) Kerala High Court: Where assessee by mistake claimed entire Integrated Goods and Services Tax credit under heads of Central goods and services tax and State goods and services tax instead of claiming it under head Integrated Goods and Services Tax and filed rectification application before Goods and Services Tax Authorities, said application of assessee was to be considered and necessary order was to be passed.
GST mismatch as per GSTR-2A and GSTR-3B
In case you needed to reconcile GST mismatch as per GSTR-2A and GSTR-3B, than Taxpayer need to consult any GST or tax professional expert. And you may take the following step,
- Download the Error Report of GSTR9 & 9C and Make Corrections accordingly with correct data.
- Reconcile your sales & purchase data and find the gap.
- Match Sales data with your Books and Purchase match with GSTR2A Data Table 8A and Evaluate the reasons for mismatch and take action to reconcile the input tax credit & output tax.
- Then collect all data with your reconciliation and consult with your respective GST or Professional Expect and consult with your respective GST Officer.
Central Goods & Services Tax Rules 88D on Input tax credit
Taxpayer can claim excess Input tax credit against GSTR-2B even if the supplier has filed Goods and services tax returns late But As per the Central goods and services tax rules 88D, a registered person shall be able to avail Input tax credit in respect of only those invoices or debit notes the details of which have been furnished by the supplier in their GSTR-1/IFF and appearing in GSTR-2B.
The claims can be up to 105 percent of the eligible ITC in GSTR-2B for a tax period. Hence, a taxpayer can claim 5 percent more Input tax credit towards the invoices/debit notes not uploaded in GSTR-2B by corresponding suppliers. It must be reconciled and adjusted in the subsequent tax periods when the invoices are actually uploaded by the suppliers.
Now Consequences of Claiming Excess Input tax credit: If the Input tax credit claimed by a taxpayer in his/her GSTR 3B is more than 105 percentage of GSTR 2B then the taxpayers GST registration can be processed for cancellation as per Rule 21 (e) of Central goods and services tax rules 2017. A proper officer will issue a notice showing the mismatch Input tax credit claimed and you will be asked to explain the reason behind claiming of Input tax credit more than 105% and If the reason is not found valid then the proper officer will be forced to cancel the registration.
Input tax credit Excess Claimed :
Question : In case Taxpayer claimed more Input Tax credit in the Dec ( QTR ), whether Taxpayer Reverse it in March (QTR) or can adjust it into that QTR it by taking less ITC in that QTR
Responses : As per my thoughts If the ITC is wrongly claimed, then it should be reversed by making the payment to that extent in the next month. You can prepare DRC-03 online by visiting the GST portal. Pay the tax liability of reversal ITC with an interest rate going as high as 24% per annum. Attach the details made in the tabular sheet with DRC-03. Select the nature of payment as “Voluntarily – 73 (5)”. Now file the DRC-03 with a digital signature or EVC.
Chartered Accountant certificate is valid in case of mismatching as per GSTR-2A and GSTR-3B?
GSTR-2A and GSTR-3B are two different returns filed by taxpayers. GSTR-2A is an auto-generated return that shows the details of inward supplies made available to the recipient on the basis of the information furnished by the suppliers in their GSTR-1. GSTR-3B, on the other hand, is a self-declared summary return that taxpayers need to file monthly, providing the summary of their outward supplies, input tax credit availed, and other details.
If there is a mismatch between GSTR-2A and GSTR-3B, it’s crucial for taxpayers to reconcile the differences and ensure accurate reporting. CAs may assist in this reconciliation process, but their certificate alone may not automatically validate any discrepancies.
GST Taxpayers are generally required to ensure that their GSTR-3B accurately reflects their tax liabilities and input tax credits, based on their business transactions and corresponding documentation.
The GST law has provisions that require a Chartered Accountants certificate in certain special circumstances, such as disbursal of budgetary support to units located in specific states. Here are some key points to consider:
- The Chartered Accountant certificate should only be issued for specific mismatch categories outlined in the GST law.
- A Chartered Accountant should issue the certificate when the amount of mismatched input tax credit exceeds INR 5,00,000/-. This limit is either INR 5,00,000/- for IGST mismatch or INR 2,50,000/-each for Central goods and services tax and State Goods and services tax / Union Territory Goods and Services Tax mismatch. And
- Verification should encompass multiple tax periods to ensure that the output tax discharged in subsequent tax periods doesn’t relate to other liabilities.
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