Rule 16 - Communication and rectification of discrepancy in reduction in output tax liability and reversal of claim of reduction

Rule 16: Address Discrepancies in Output Tax Claims via FORM GST ITC-1; Rectify or Adjust in Next GSTR-3.

Rule 16 of the Draft GST Return Rules outlines procedures for addressing discrepancies in claims for reduction in output tax liability. Any such discrepancies must be communicated electronically to the registered taxable person and recipient through FORM GST ITC-1 by the end of the month when the matching is conducted. Suppliers and recipients can rectify discrepancies in their respective statements of outward and inward supplies for that month. If unrectified, the discrepancy amount will be added to the supplier's output tax liability in FORM GSTR-3 for the following month. Rectification involves aligning supply details between supplier and recipient.