Input tax credit matching leads to reversal where supplier returns don't align, with additions and interest applied to recipient. Section 42 establishes matching of recipients' inward-supply details with suppliers' outward returns and import tax to accept valid input tax credit. ... Summary
Input tax credit matching leads to reversal where supplier returns don't align, with additions and interest applied to recipient.
Section 42 establishes matching of recipients' inward-supply details with suppliers' outward returns and import tax to accept valid input tax credit. Discrepancies where recipient claims exceed supplier-declared tax or where outward supplies are undeclared are communicated to both parties; unrectified amounts and duplicate claims are added to the recipient's output tax liability. The recipient may reduce that addition if the supplier later files required invoice details within the prescribed time; interest is charged on added amounts from the date credit was availed, and interest refunds are capped by supplier-paid interest.
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