Input tax credit

[Bharat Cholleti]

Dear sir,

Applicant availed Input tax credit as per the invoices which is not reflected in 2A, Now received notice for payment of difference tax between 3B and 2A, applicant remitted the payments to supplier through cheques only. kindly support with case laws in this matter. Section 16 2(aa) is only effective from 01-01-2022 As per Finance Act 2021.

[DR.MARIAPPAN GOVINDARAJAN]

Your query is not clear.

[Ganeshan Kalyani]

Yes, Sec 16(2)(aa) is made effective from. 01.01.2022 vide Notification 39/2021-CT dated 21.12.2021.

[Ganeshan Kalyani]

Pls elaborate your query.

[Bharat Cholleti]

Sir,

Notice issued for difference tax in between 2A and 3B for the years 2018-19 to 2021-22, ITC as per 2A is less and 3B is higher, these difference tax applicant is having invoices supplier uploaded as B2C instead of B2B hence not reflected in 2A and difference arise between 2A and 3B.

, in this situation is recipient eligible for ITC? please advice.

[Shyam Naik]

Please ask suppliers to provide a CA certificate stating that the supply has been reported as B2C in place of B2B. However, due GST on the supply has been remitted.

Reliance can be placed on Internal Circular No. CST /JC (HQ-5)/Scrutiny/Issues/File No- /B-1 dt 25.02.2022 on "Guidelines with respect to legal issues pertaining to return scrutiny for tax periods
2017-18 and 2018-19" issued by the Commissioner of State Tax, Government of Mahashratra.

[Ganeshan Kalyani]

It is hardship on the recipient taxpayer for the ITC has been denied to him. Department follows 2A and allows credit only if invoice appears in 2A.

[Shilpi Jain]

Agree with Shyamji. Get a CA certificate of the supplier in the present case and close the dispute.

I also agree with the querist that the condition of matching is not required prior to 1.1.22 though this point of argument will be a long way of dispute which may have to go up to the Courts to settle.

[THYAGARAJAN KALYANASUNDARAM]

Dear Mr.shyam,

Is there any similar circular issued by karnataka state / central government. Since I have one case pending in karnataka commercial court.

Thanks in Advance.

[Shyam Naik]

No such circular by Karnataka State. However, Circular issued by one state is equally applicable in other states. Benefit of the circular was extended in West Bengal in my own case.

Further, the Audit Manual of CBIC requires the auditor to verify the payment of tax from suppliers end for high value transactions in case of mismatch between 2A and 3B. Point is the manual do not require ITC reversal and is concerned only with discharge of tax by the supplier.

AI Summary

Input tax credit eligibility when supplier reports B2C can be denied due to return mismatch; obtain supplier certification.
The issue is denial of Input Tax Credit where supplier-uploaded records show B2C reporting instead of B2B, causing a mismatch between the recipient's returns and auto-populated purchase data; practitioners recommend obtaining a supplier certificate confirming tax discharge and relying on administrative guidance that emphasizes verification of supplier tax payment rather than automatic reversal of recipient credit.