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

Input tax credit reduction required when a supplier issues a credit note, reflected in GSTR-2A and reversed in GSTR-3B. Issuance of a credit note by a supplier reduces the recipient's Input Tax Credit, appears in the recipient's GSTR-2A CNDN entries when reported by the supplier, and requires the recipient to reverse the corresponding ITC in its periodic return filing, with reversal entries now auto-populated into the designated reversal field rather than treated as an additional credit.