Many a times, in the cases when the Input Tax Credit claimed in GSTR-3B and GSTR-2A are inconsistent, a certificate is necessary to demonstrate the validity of the supply made. The Central Board of Indirect Taxes and Customs (CBIC) had made it clear that the GST department can request a certificate from a Chartered Accountant or a Cost Accountant for the case, a discrepancy between the ITC claimed in Form GSTR-3B and that available in Form GSTR 2A of the registered person. This is done in order to show that the supplier’s invoices have actually been made to the said registered person and that the supplier has paid the tax in his return in FORM GSTR 3B.
A circular was issued on 27th December 2022 regarding this situation. This circular provides solution to an important issue where a recipient claims ITC in GSTR 3B but it not being reflected in GSTR 2A. This problem arises right from the base during 2017-18 when GSTR 2A option was not available in the GST portal. Considering this problem, this circular has been issued on the recommendation of the GST Council.
This circular includes 4 situations:
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- Where the supplier has not filed his GSTR 1 but filed GSTR 3B
- Where the supplier has filed both GSTR 1 and GSTR 3B, but forgot to report some supplies.
- Where the supplier has filed both GSTR 1 and GSTR 3B including all the invoices, however instead of B2B the invoices are taken under B2C.
- Where the supplier has filed both GSTR 1 and GSTR 3B including all the invoices, however instead of considering the original recipient, GSTIN of some other recipient has been added by mistake. The respective officer of the department proceeds with the following procedure:
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- To begin with, the officer will obtain all the invoice copies from the registered person which they have claimed the ITC in GSTR 3B but not being reflected in 2A due to any of the above mentioned four situations and check if the credits for the invoices has been truly claimed in GSTR 3B but the invoices are not being reflected in GSTR 2A.
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- Department will usually ensure that all the conditions of Section 16 of CGST ACT is being met promptly and also will check that this credit is not violating the rules of Section 17 or 18 of CGST ACT (Not block credit).
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- If the difference between the credit claimed is more than 5 Lakh Rupees, certificate from a CA (Chartered Accountant) or CMA (Cost Accountant) containing their UDIN will be obtained affirming the certainty of such supplies.
- If the difference between the credit claimed is less than 5 Lakh Rupees, certificate from the concerned supplier will be obtained affirming the certainty of such supplies.
This circular can only be applied when there is any scrutiny proceeding under Section 61, or an audit under Section 65, investigation under section 67. It can also be applied for adjudicating procedures under section 73/74, or procedures before the appellate authority under section 107. But this notification is not relevant for proceedings which are already completed.
Also, this circular is relevant for the financial years 2017-18 and 2018-19 when the GSTR 2A facility was not implemented properly making the reflection of supplier’s GSTR1 details in recipient’s GSTR-3B inconsistent. However, The Hon’ble Karnataka High Court in M/s. Wipro Limited India v. the Assistant Commissioner of Central Taxes and Ors. [Writ Petition No. 16175 of 2022 (T-Res) dated January 6, 2023] has allowed the assessee to rectify the errors committed at the time of filing of Forms and submitting GST Returns. Held that, the error committed by the assessee in showing the wrong Goods and Services Tax Identification Number (“GSTIN”) in the invoices, which was carried forward in the relevant forms is a Bonafede error, which has occurred due to Bonafede reasons, unavoidable circumstances and sufficient cause. Hence, Circular No. 183/15/2022-GST dated December 27, 2022 (“the Circular”), which allows rectification of such Bonafede and inadvertent mistakes, would be directly and squarely applicable. Further, allowed the assessee to avail the benefit of the Circular for FY 2019-20 also. Stated that, though the Circular is only referred to F.Y. 2017-18 and 2018-19, the benefit of the Circular would be given for the F.Y. 2019-20 also, since there are identical errors committed by the Petitioner in the F.Y. 2019-20. Though this is applicable only for jurisdiction of Karnataka, persuasive value will still be there even though there will be no binding value.
