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Cancellation, Suspension and Revocation of Registration in GST:

The Central Board of Indirect Taxes and Customs (CBIC) has vide Circular No 183/15/2022-GST dated 27th of December, 2023 has issued the most awaited clarification of GST for dealing the difference in GST Input Tax Credit (GST ITC) availed in FORM GSTR 3B as compared to that detailed in FORM GSTR 2A for FY 2017-18 and FY 2018-19.

The Clarification issued by the CBIC is as Follows:

  1. Section 16, of the CGST Act, 2017 mentions the eligibility and the conditions for availing GST Input Tax Credit (GST ITC). During the initial stage of GST implementation, means for the FY 2017-18 and FY  2018-19, there were so many cases, wherein the suppliers have eventually failed to furnish proper and accurate details of outward supplies or you can say in their FORM GSTR-1, which has led to certain deficiencies or discrepancies in FORM GSTR-2A of their recipients. Though, the concerned recipients i.e. Purchaser or Service Receiver may have availed their respective GST input tax credit on the said supplies in their returns in FORM GSTR-3B on the basis of Invoice issued to them. The difference between the amount of GST ITC availed by the registered persons in their returns in FORM GSTR-3B and the amount as available in their FORM GSTR-2A are being noticed by the GST tax officers during proceedings due to such credit not flowing to FORM GSTR-2A of the said registered persons. Such Differences are considered by the GST tax officers as representing ineligible ITC availed by the registered persons, and are being flagged seeking explanation from the them for such differences and/or for reversal of such ineligible ITC.
  2. It is already mentioned that the FORM GSTR 2A could not be made available then to the GST taxpayers on the common portal during the initial stages of GST implementation. Moreover, the restrictions on Av ailment of GST ITC by the registered persons up to certain specified limit beyond the ITC available as per FORM GSTR 2A were provided under rule 36(4) of Central Goods and Services Tax Rules, 2017 (hereinafter referred to as “CGST Rules”) only with effect from 9th October 2019. Though, the availability of GST ITC was subjected to certain restrictions and certain conditions as specified under Section 16 of CGST Act from 1st July, 2017. In view of this, there were various representations that have been received from the trade as well as the GST tax authorities, seeking clarification or justification regarding the manner of dealing with such differences between the amount of GST ITC availed by the registered persons in their FORM GSTR 3B and the amount as available in their FORM GSTR 2A during FY 2017-18 and FY 2018-19.
  3. In order to ensure uniformity in the implementation of the provisions of the law across the field formations, the Board, in exercise of its powers conferred under section 168(1) of the CGST Act, hereby clarifies as follows:

Sn. Scenario Clarification
  1.   GSTR 1 – Not Filled GSTR 3B – Filled     In such cases, the difference in ITC claimed by the registered person in his return in FORM GSTR-3B and that available in FORM GSTR-2A may be handled by following the procedure provided in para 4 below.  
  2.   GSTR 1 – Filed but supply not reported
GSTR 3B – Filled  		   In such cases, the difference in ITC claimed by the registered person in his return in FORM GSTR-3B and that available in FORM GSTR-2A may be handled by following the procedure provided in para 4 below.  
  3.   GSTR 1 – Filed but the supply reported as B2C GSTR 3B – Filled     In such cases, the difference in ITC claimed by the registered person in his return in FORM GSTR-3B and that available in FORM GSTR-2A may be handled by following the procedure provided in para 4 below.  
  4.   GSTR 1 – Filed but the supply declared with the wrong GSTIN of the recipient GSTR 3B – Filled     In such cases, the difference in ITC claimed by the registered person in his return in FORM GSTR-3B and that available in FORM GSTR-2A may be handled by following the procedure provided in para 4 below.   In addition, the proper officer of the actual recipient shall intimate the concerned jurisdictional tax authority of the registered person, whose GSTIN has been mentioned wrongly, that ITC on those transactions is required to be disallowed, if claimed by such recipients in their FORM GSTR-3B. However, allowance of ITC to the actual recipient shall not depend on the completion of the action by the tax authority of such registered person, whose GSTIN has been mentioned wrongly, and such action will be pursued as an independent action.  

  1. The proper GST officer should firstly seek the details from the GST registered person regarding the invoices on which GST ITC that has been availed by the registered person in his FORM GSTR 3B but which are not reflecting in his FORM GSTR 2A. He shall then ascertain fulfilment of the following conditions of Section 16 of CGST Act, 2017 in respect of the GST input tax credit availed on such invoices by the said GST registered person:

  • That he is in possession of a tax invoice or debit note issued by the supplier or such other tax paying documents;
  • that he has received the goods or services or both;
  • that he has made payment for the amount towards the value of supply, along with tax payable thereon, to the supplier.

Besides, the proper GST officer should also check that whether any reversal of GST input tax credit is required to be made in accordance with section 17 or section 18 of CGST Act, 2017 and also whether the said GST input tax credit has been availed within the time period specified under sub-section (4) of section 16 of CGST Act, 2017.

4.1 In order to verify the condition of clause (c) of sub-section (2) of Section 16 of CGST Act, 2017 that GST on the said supply has been paid by the supplier, the following action may be taken by the proper GST officer:

4.1.1 In case, where difference between the GST ITC claimed in FORM GSTR 3B and that available in FORM GSTR 2A of the registered person in respect of a supplier for the said year exceeds Rs. 5,00,000, and the proper of GST Officer should ask the GST registered person to produce a certificate for the concerned supplier from the Chartered Accountant (CA) or the Cost Accountant (CMA), certifying that supplies in respect of the said invoices of supplier have actually been made by the supplier to the said registered person and the tax on such supplies has been paid by the said supplier in his return in FORM GSTR 3B. Certificate issued by CA or CMA shall contain UDIN.

4.1.2 In cases, where difference between the GST ITC claimed in FORM GSTR 3B and that available in FORM GSTR 2A of the registered person in respect of a supplier for the said financial year is up to Rs 5,00,000, the proper GST officer shall ask the claimant or taxpayer to produce a certificate from the concerned supplier to the effect that said supplies have actually been made by him to the said registered person and the tax on said supplies has been paid by the said supplier in his return in FORM GSTR 3B Return.

4.2 However, it may be noted that for the period FY 2017-18, as per proviso to section 16(4) of CGST Act, 2017, the aforesaid relaxations shall not be applicable to the claim of GST ITC made in the FORM GSTR-3B return filed after the due date of furnishing return for the month of September, 2018 till the due date of furnishing return for March, 2019, if supplier had not furnished details of the said supply in his FORM GSTR-1 till the due date of furnishing FORM GSTR 1 for the month of March, 2019.

  1. It may also be noted that the clarifications given but the CBIC are case specific and are applicable to the bonafide errors committed in reporting during FY 2017-18 and 2018-19. Further, these guidelines are clarificatory in nature and may be applied as per the actual facts and circumstances of each case and shall not be used in the interpretation of the provisions of law.
  2. These instructions will apply only to the ongoing proceedings in scrutiny/audit/ investigation, etc. for FY 2017-18 and 2018-19 and not to the completed proceedings. However, these instructions will apply in those cases for FY 2017-18 and 2018-19 where any adjudication or appeal proceedings are still pending.

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