GST ITC Difference period 2022-23

[KS Bhat]

In June 2022 return total Sales 10000 rs reported in B to B and balance 90000 reported in B to C buyer received notice If i issue certificate about this technical error is sufficient to buyer so that his demand nullified

 

[Raam Srinivasan Swaminathan Kalpathi]

Dear Querist

Your suggestion would legally not be sufficient. Kindly note Circular 183 and 193 which allowed ITC based on a certificate either from the supplier or CA, depending on the quantum of ITC, is applicable only for the years 2017-20 and and 2020-21 respectively. Your only option will be to knock on the doors of the judiciary. Providing a certificate to the recipient may not solve this issue.

[KASTURI SETHI]

Dear querist,

There is a plethora of case laws on the issue of technical error/clerical error/ procedural lapse in favour of the assessees.

Pl. elaborate your query for the purpose of posting relevant case laws here.

[KS Bhat]

Sir

I have issued Sales invoice (two in number) during June 2022. One invoice updated in GSTR-1 B to B another invoice updated in B to C of the relevant GSTR-1. This month my customer received notice of ITC difference for the period 2022-23. Now if i give certificate to him stating about this technical error is sufficient or any other option available to him to against demand created by department

[KASTURI SETHI]

Only specific case law on the issue can help you.

[KALLESHAMURTHY MURTHY K.N.]

Sir,

Please refer to the case law of Shiva Jyoti Construction vs. CBIC & Others (2023 (1) TMI 881 - ORISSA HIGH COURT): The court permitted the petitioner to amend their GSTR-1 from B2C to B2B even beyond the statutory deadline. The court held that since the transaction was revenue-neutral (tax was paid to the government), the recipient should not be denied ITC due to a bona fide error by the supplier.

[KASTURI SETHI]

Sh.Kalleshamurthy Murthy K.N. Ji,

Sir, The issue is squarely covered by the judgement posted by you. Thanks a lot for immediate and correct response.

[KASTURI SETHI]

Dear Querist,

Also go through the following judgement of Supreme Court :-

2025 (4) TMI 101 - SC Order - Central Board of Indirect Taxes and Customs Versus Aberdare Technologies Pvt. Ltd.

GST : Apex Court lays down guidelines for C.B.I & C asking for change in provisions to allow rectification of bona fide errors in returns.

[Shilpi Jain]

Pls give a declaration that the liability has been disclosed in returns and the tax is paid. Even better if your CA can give a certificate in this regard.

[KASTURI SETHI]

In this scenario, CAs certificate should be accepted. There are case laws also to this effect in favour of the assessees. However, it is discretion of the department.

Lay emphasis on the genuineness of transactions. Period mentioned in the Boards Circulars No. 183 and 193 should not be a bottleneck, especially, keeping in view of genuineness of transactions and support of case laws mentioned at serial no.4 and 5 coupled with CBICs guidelines.

[Shilpi Jain]

Now-a-days businesses do not contest the demands raised by department considering the quantum of demand and the cost involved in contesting it. If the customer has to defend this demand he may re-think on this line.

However, from your side this declaration / CA certificate should suffice.

AI Summary

Input tax credit entitlement may survive supplier return errors, but remedy often requires judicial relief or department discretion. A supplier's misreporting of invoices between B2B and B2C can trigger ITC demands; supplier declarations or CA certificates have been accepted in some authorities and by CBIC circulars for earlier years, but those circulars do not cover 2022-23. Case law permitting post deadline amendment and emphasizing revenue neutrality supports the recipient's ITC entitlement, yet acceptance of certificates is discretionary and, absent applicable circular relief, recipients may need to pursue judicial relief relying on bona fide error doctrines and case law.