FY 2021-22 ITC EXCESS CLAIMED SUPPLIER NOT FILLED IN GSTR-1

[DURAI RAJ]

You have availed excess ITC in GSTR-3B as compared to the tax declared by your suppliers in their GSTR-1 DRC-01 Notice how we have claimed ITC Based on  Available purchase bills how to rectify this notice

[Sadanand Bulbule]

At the outset, proper reconciliation between GSTR-3B & GSTR-2A/2B is required to double check the facts. Despite If you have wrongfully utilised excess ITC, then it should be reversed along with interest under Section 50[3] of the Act. Alternatively, if it is the fault of the supplier but you have valid documentation, you may argue for leniency. Lawful ITC cannot be disallowed.

 

[Shilpi Jain]

Query not very clear. Also period of dispute not mentinoed.

[Harshaditya Kabra]

Section 16(2)(c) Compliance Challenge

The core issue lies in Section 16(2)(c) of the CGST Act, which requires that "tax charged in respect of supply has been actually paid to the government by the supplier". However, several High Court judgments have provided relief to genuine taxpayers in similar situations:

Favorable Legal Precedents:

• Bharat Aluminium Company Ltd. v. Union of India (2024 (5) TMI 258 - CHHATTISGARH HIGH COURT): ITC cannot be denied solely because seller didnt upload invoices timely

[Sadanand Bulbule]

2025 (6) TMI 116 - ALLAHABAD HIGH COURT - M/s R.T. Infotech Versus Additional Commissioner Grade 2 And 2 Others

AI Summary

Input Tax Credit condition: supplier payment requirement may force reversal with interest or allow retention with documentary proof. Where ITC in GSTR 3B exceeds supplier reported figures, taxpayers must reconcile GSTR 3B with GSTR 2A/2B and either reverse wrongly availed credit with interest under Section 50(3) or, if supplier non filing is the cause and valid documents exist, defend retention of lawful ITC by invoking the supplier payment condition in Section 16(2)(c) and relevant judicial precedents supporting bona fide recipients.