If you are a registered taxpayer under GST, you must have received a notice from the GST department to reverse the credit availed on supplier’s invoice who has not filed GSTR-3B returns. This type of notice is common for the period 2017-18 and 2018-19 where facility of GSTR-2A was not available to reconcile the credit.
When the notice is received, the taxpayer gets to know which suppliers have not paid the tax to the Government. Tax authorities are invoking Section 16(2)(c) of the GST Act 2017 and creating your liability to reverse the input tax credit.
But, CBIC has issued a circular for the taxpayer and GST authorities in this regard, where GSTR-3B and GSTR-2A difference is reported.
What could be the reasons for the difference
The department has outlined the four reasons which can be there for the difference in Input tax credit available in GSTR-3B and available in GSTR-2A. The details are as follows:
- Where the supplier has failed to file FORM GSTR-1 for a tax period but has filed the return in FORM GSTR-3B for said tax period, due to which the supplies made in the said tax period do not get reflected in FORM GSTR-2A of the recipients.
- Where the supplier has filed FORM GSTR-1 as well as return in 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 does not get reflected in FORM GSTR-2A of the recipient.
- Where supplies were made to a registered person and invoice is issued as per Rule 46 of CGST Rules containing GSTIN of the recipient, but supplier has wrongly reported the said supply as B2C supply, instead of B2B supply, in his FORM GSTR-1, due to which the said supply does not get reflected in FORM GSTR-2A of the said registered person.
- Where the supplier has filed FORM GSTR-1 as well as return in FORM GSTR-3B for a tax period, but he has declared the supply with wrong GSTIN of the recipient in FORM GSTR-1.
These are the reasons due to which the difference has arised.
Remedy for such difference
The said Board’s Circular has also outlined the solution in detail, where you have to submit the declaration from the supplier. Para 4.1.1 and 4.1.2 of the said Circular states that –
“4.1.1 In case, where 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 (CA) or the Cost Accountant (CMA), 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. Certificates issued by CA or CMA shall contain UDIN. UDIN of the certificate issued by CAs can be verified from ICAI website- https://udin.icai.org/search-udin and that issued by CMAs can be verified from ICMAI website https://eicmai.in/udin/VerifyUDIN.aspx”
“4.1.2 In cases, where 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 is upto Rs 5 lakh, the proper officer shall ask the claimant to produce a certificate from the concerned supplier to the effect that said supplies have actually been made by him to the said registered person and the tax on said supplies has been paid by the said supplier in his return in FORM GSTR 3B”
The declaration format should be
There is no specific format, but from my experience, you can submit the declaration in such a format so that it can be accepted. The declaration should include: –
- Name of the Supplier and GSTIN and Address in its letterhead
- List of invoices on which items has been supplied and when and which returns the said tax has been paid to the government
- Details of the reasons (as listed above) why the details of the said invoices not appearing in the recipient’s GSTR-2A. Detailed explanation may be submitted
- Authorized signatory’s signature with seal or CA’s name, sign, ICAI or ICMAI registration no. and seal..
Sample format
Remember
Providing as many details as for the reason of discrepancies makes your case strong. By not submitting proper detailed declarations from the supplier, your stance may be rejected and you may be liable to pay or reverse the tax along with interest and penalty as per the law. You can advise your supplier to mention the detailed reasons out of the outlined four reasons from the board’s circular so that the tax authorities can easily scrutinize the same.
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