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

Discrepancy communication in output tax triggers obligation to rectify returns or reversal added to supplier's tax liability.

Discrepancies in claimed reduction of output tax liability must be communicated electronically to the claimant and the recipient via MIS forms by the last date of the month in which matching occurs. Suppliers may rectify outward-supply entries and recipients may rectify inward-supply entries for the month of communication to achieve matching. If unrectified, an amount equal to the discrepancy is added to the supplier's output tax liability, debited to the electronic liability register, and shown in the supplier's return for the month following the communication.