Credit note and ITC

[Sudhir Kumar]

If a supplier issue Credit note to the recipient, would it be impacted on his ITC ledger or ITC availability in GSTR 2A.

[Charu Tyagi]

Yes, issue of credit notes by supplier will be reflected on GSTR-2A, and the claim of reduction in output tax liability due to issuance of credit notes in FORM GSTR-1 that were accepted by the corresponding recipient in FORM GSTR-2 without amendment shall be treated as matched if the said recipient has furnished a valid return.

[GUNASEKARAN K]

Yes, Credit Note issued by the supplier will impact the ITC availability under GSTR2A of Goods recipient.

The reversal of Credit will reflect in Table 4(B)(2) - Others in GSTR-3B Return.

[KASTURI SETHI]

I agree with both experts.

[Shilpi Jain]

CN related GST will have to be reduced from ITC. This will have to be shown net off in table 4(A)(5).

Earlier there was no clarity and hence people were showing in 4B2. but now it is clarified that such CN to be shown in 4A5 - net

[Ganeshan Kalyani]

Assuming that you are issuing GST credit note. If yes then recipient's ITC will be reduced by the GST on the credit note.

[GUNASEKARAN K]

Reversal of ITC will be auto populated in Table 4(B)(2) - Others in recipient's GSTR-3B Return.

In earlier format the recipient reduce the ITC and give the Net ITC value in Table 4(A)(5) but now it is auto populated.

[Padmanathan KV]

Agreed with the views of experts, The ITC pertaining to credit note will be reflected in GSTR-2A in CNDN and it has to be reversed in GSTR-3B also.

AI Summary

Impact of Supplier Credit Notes on Input Tax Credit and GSTR-2A: Table 4(B)(2) and Table 4(A)(5) Guidance A discussion on the impact of credit notes issued by suppliers on the Input Tax Credit (ITC) ledger and ITC availability in GSTR-2A under the Goods and Services Tax (GST) framework. Participants agree that the issuance of credit notes affects the recipient's ITC, which is reflected in GSTR-2A. The reversal of ITC is shown in Table 4(B)(2) of the GSTR-3B return. Recent clarifications indicate that such credit notes should be shown net in Table 4(A)(5). The consensus is that the recipient's ITC is reduced by the GST amount on the credit note.