Indirect Taxation

To enable taxpayers to efficiently address invoice corrections or amendments with their suppliers through the GST portal, a new communication mechanism is being introduced. This initiative aims to assist taxpayers in reconciling their records with invoices issued by suppliers, thereby ensuring accurate Input Tax Credit (ITC) claims. However, taxpayers have encountered certain challenges in this process. To address these issues, the GSTN has implemented enhanced controls and greater transparency to effectively resolve the queries and concerns raised by taxpayers:

• Question 1: How can a recipient avail of ITC of wrongly rejected Invoices / Debit notes / ECO-Documents in IMS, as the corresponding GSTR-3B of the same tax period was also filed by the recipient?

Answer: In such cases recipient can request the corresponding supplier to report the same record (without any change) in the same return period’s GSTR-1A or the respective amendment table of subsequent GSTR-1 / IFF. Thus, the recipient can avail the ITC based on the amended record by accepting such record on IMS and recomputing GSTR-2B on IMS. Here, the recipient will get the ITC of complete amended value as original record was rejected by the recipient.

However, the recipient will be able to take ITC for the again furnished document by the supplier, as stated above, only in the GSTR-2B of the concerned tax period.

• Question 2: If any original record is rejected by the recipient and the supplier furnishes the same record in GSTR-1A of the same tax period or in the amendment table of GSTR-1 / IFF of a subsequent period, till the specified time limit, then what impact will it have on the supplier’s liability?

Answer: In case the supplier had furnished an original record in GSTR-1 / IFF but the same record was rejected wrongly by the recipient in IMS. In such cases supplier on noticing the same in the supplier’s view of IMS dashboard or on request of recipient, may furnish the same record again (without any change) in GSTR-1A of same tax period or the amendment table of GSTR-1 / IFF in any subsequent period, till the specified time limit, then the liability of supplier will not increase. As amendment table takes the delta value only. Thus, in the present case of the same values, the differential liability increase will be zero.

• Question 3: As a recipient taxpayer, how to reverse the ITC of a wrongly rejected Credit note in IMS, as the corresponding GSTR-3B has already been filed?

Answer: In such cases recipient can request the concerned supplier to furnish the same Credit note (CN) without any change in the same return period’s GSTR-1A or in the amendment table of the subsequent period’s GSTR-1 / IFF. Now recipient can reverse the availed ITC based on the amended CN by accepting the CN on IMS. Hence, the recipient’s ITC will get reduced with the complete amended value, as soon as the recipient recomputes GSTR-2B on IMS. The reduced value is the same as that of the value of original CN, as in this case, the complete original CN was rejected by the recipient.

• Question 4: If any original Credit note was rejected by the recipient and the supplier furnishes the same credit note in GSTR-1A of the same tax period or in the amendment table of GSTR-1 / IFF of any future tax period, till the specified time limit, then what impact will it have on the supplier’s liability?

Answer: At first instant, the supplier’s liability will be added back in the open GSTR-3B return, because of the original credit note rejection by the recipient. However, as the supplier furnishes the same credit note in GSTR-1A of the same tax period or in the amendment table of GSTR-1 / IFF in any subsequent period, the supplier’s liability for this amendment will get reduced again, corresponding to the value of amended CN (which in this case is the same as original). Thus, the net effect on the liability of supplier will be only once.