Section 16(2)(c)

[Rajesh Kumar]

Dear Expert,

A supplier of service is paying GST through GSTR-3B as half (approx.) of the liability declared in GSTR-1. Therefore, there is mismatch between GSTR-3B and GSTR-1.

Now. As per section 16(2)(c) which stipulates as under:-

c) subject to the provisions of section 41section 41 or section 43A, the tax charged in respect of such supply has been actually paid to the Government, either in cash or through utilisation of input tax credit admissible in respect of the said supply;

Now, Whether the ITC is not available to the receipients of services ?

At what extent they are required to reverse ITC I.e. half ( proportionate to the unpaid duty liability) or full ITC which was availed ?

[Amit Agrawal]

This is repetition of a query. Issue is already discussion under Issue-ID - 118395. Kindly give your views there, so to maintain continuity of discussion and avoid repetition.

AI Summary

Input tax credit availability when supplier underpays: does recipient reverse full credit or only proportionate amount? Whether recipients may retain input tax credit when the supplier declared higher tax but paid only part of that tax, given the statutory condition that tax charged must have been actually paid to the Government or discharged through admissible input tax credit. The core question is whether the recipient must reverse credit in full or only proportionately to the unpaid tax, in light of reconciliation and statutory mechanisms addressing supplier payment shortfalls.