ITC Mismatch in GSTR-3B vs GSTR-2B, you may get notice if mis-match exceeds 20%

ITC Mismatch in GSTR-3B vs GSTR-2B

ITC Mismatch in GSTR-3B vs GSTR-2B: From the past year, notices of discrepancy of ITC in GST ASMT-10 have been issued by the GST department of almost all the States. The said notice sought explanation from the taxpayers for the difference between ITC claimed in GSTR-3B and ITC available in GSTR2B/2A. Thus, an important issue comes into the brains of taxpayers, and professionals, whether input tax credit can be denied merely on the ground of mismatch between ITC availed in GSTR-3B with that reflected in GSTR-2A/2B.

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If there is a discrepancy between the ITC claimed by a business and the output tax liability declared by the supplier, the indirect tax authorities may notify the business. If they do not respond satisfactorily, they may be required to pay an amount equal to the “excess of credit claimed” plus interest and penalties.

Before the Goods and Services Tax (GST) Council meeting the following week, an official committee has advocated for further restricting the returns filing system to limit the scope of claiming input tax credit in order to deter fraudulent practises.

According to news reports, the taxpayer may receive a GST notice from the Department if the difference between the ITC claimed in GSTR-3B and GSTR-2B exceeds 20% or exceeds Rs. 25 lakh.

This is the current agenda for the upcoming GST Council Meeting, which will be held on Tuesday, July 11, 2023.