Credit Note Rejected by Recipient in IMS – Tax Paid in GSTR-3B – Remedy Available?

[Hemlata Agarwal]

We had issued a genuine credit note to the recipient. However, the recipient has rejected the credit note in IMS. Due to this rejection, the value got added back to our output tax liability in GSTR-3B, and we have already discharged the tax liability accordingly.

In this situation, kindly guide us on:

• What remedies/options are available to the supplier?
• Any legal provision or CBIC clarification applicable in such cases?

Expert guidance will be highly appreciated.

AI Summary

Credit note rejected in IMS; re-file via GSTR-1A or amendment to restore tax credit upon recipient acceptance.
When a supplier's valid credit note is rejected in IMS and the supplier has paid the added output tax in GSTR 3B, the remedy is to re-furnish the identical credit note through GSTR 1A or the Amendment Table (9C) of the next GSTR 1 and secure recipient acceptance so the added tax liability is neutralised, consistent with IMS advisories and Section 34(2).