Ground-2: Excess Availment of Input Tax Credit under IGST Act (GSTR-2A vs. GSTR-3B) -1

[Shambhavi Nayak]

The Allegation: Upon verification of the books of accounts read with statutory returns Form GSTR-9 and Form GSTR-9C for the financial year 2021-22, it is observed that the Taxpayer has availed Input Tax Credit (ITC) under the IGST head amounting to Rs. 4,41,33,614.82, which is in excess of the auto-populated amount of Rs. 4,39,16,096.91 reflected in Form GSTR-2A (net of credit notes). It is pertinent to note that the records do not indicate any ITC brought forward from the preceding financial year, confirming that the subject claim pertains exclusively to transactions within FY 2021-22. Consequently, the discrepancy of Rs. 2,17,517.91 constitutes an excess claim availed in direct contravention of the provisions of Section 16 of the GST Acts. Accordingly, the SCN proposed the recovery of Rs. 2,17,517.91 along with interest.

Reply of the Taxpayer: The Taxpayer filed replies to the Show Cause Notice, including a submission dated 18-12-2025, contending the following:

a. That they have followed Form GSTR-2B for availment of credit, which they claim is the correct basis.

b. That the discrepancy in GSTR-2A arises because certain suppliers failed to report sales in GSTR-1 or reported them belatedly, and Credit Notes were issued by some dealers in 'April 2024' (appears to be a typographical error for 'April-2021')

c. They relied on the judgment of the Hon'ble High Court of Orissa in M/s Raaas Corporate Service Pvt Ltd vs State of Odisha to argue that demand cannot be raised solely on mismatches.

d. That they maintain a closing balance of Rs. 4,60,342/- in their Electronic Credit Ledger, and therefore, the demand is not sustainable.

[Raam Srinivasan Swaminathan Kalpathi]

Dear Querist

Kindly refer to the recent landmark judgment of the Tripura HC - re Sahil Enterprises - 2026 (1) TMI 385 - TRIPURA HIGH COURT delivered on Jan 6, 2026. Nevertheless, you have a strong case, if client had reported the reconciliation difference in GSTR-9C with appropriate explanations. Even otherwise, this is a fairly arguable case.

[KASTURI SETHI]

A query is incomplete without a specific question/problem at the end of the query.

AI Summary

Input tax credit mismatch under GST disputed on GSTR-2A and GSTR-2B reconciliation, with recovery proposed. Excess input tax credit under the IGST head was alleged for FY 2021-22 because the credit claimed in GSTR-3B and annual returns exceeded the auto-populated GSTR-2A position after credit notes, and the discrepancy was treated as an excess claim under Section 16 with recovery and interest proposed. The taxpayer disputed the mismatch by relying on GSTR-2B, delayed supplier reporting, judicial authority on return mismatches, and a closing balance in the electronic credit ledger. Forum replies described the matter as arguable and referred to reconciliation differences in GSTR-9C.