GSTR 3B not filled by Supplier

[Shambhavi Nayak]

GSTR 1 filled by supplier and the ITC has been auto populated in GSTR-2B as per GSTR 2B purchaser claimed ITC. Now the department has send ASMT 10 saying the supplier has not filled GSTR-3B hence ITC has to be reversed. How to reply in ASMT 11

[KASTURI SETHI]

First of all you should persuade your supplier to file GSTR-3B return and, thereafter, you should file reply in ASMT-11. Without payment of tax into Govt.'s exchequer by the supplier. the department shall not drop the ASMT-10. Obtain copy of return filed by the supplier and attach with ASMT-11. The matter would be closed. This is practical approach. Otherwise face rigours of litigation

In addition to this, attach purchase invoice, E-way bill, Proof of payment made to the supplier, other transportation docs etc.

The burden of proof is cast upon the buyer who avails ITC under Section 155 of CGST Act.

Although there are many judgements in favour of the buyer who avails ITC, yet the best and short-cut approach is to persuade the supplier to deposit tax and file GSTR-3B.

[Raam Srinivasan Swaminathan Kalpathi]

I am of the opinion that the department has a strong case. The reason - violation of Rule 37A by the recipient of service. With the advent of this Rule the RTP will have to continuously track the filing status of the supplier of goods/ services. Every RTP (small, medium or large) must incorporate SOPs for vendor due diligence. As advised by the respected expert hereinabove, this correspondent would also exhort the RTP to either request the supplier to remit the tax and upload 3B or the recipient would not have any other choice but to reverse the ITC availed with interest u/s.88B.

[KALLESHAMURTHY MURTHY K.N.]

Sir,

Both answers are valuable.

[Shilpi Jain]

Rule 37A was introduced from 26.12.2022 which governs this requirement of 3B filing by supplier. If your period is before that you can contest stating the said requirement was not in law during that time.

[Rajat Gupta]

You can check if the department has issued proceedings for non-payment of tax against the supplier or not. If the supplier has later on deposited tax through DRC-03 or the proceedings are pending, you can use it to defend your case.

AI Summary

Input tax credit reversal may follow supplier non-filing, requiring recipient verification, response evidence, and supplier tax compliance.
Input tax credit auto-populated from a supplier's GSTR-1 may be disputed if the supplier has not filed GSTR-3B or deposited tax. A recipient replying to ASMT-10 should seek supplier compliance and provide GSTR-3B proof, invoices, e-way bills, payment evidence and transportation records. Rule 37A may govern reversal implications, subject to its applicability for the relevant period. Monitoring supplier filing status and vendor due diligence are important compliance measures.