The GST authorities have issued notices to several companies for discrepancies in the claim of input tax credit (ITC). The notices were sent under Section 150 of the CGST Act, 2017, and ask taxpayers to file an information return explaining the “short reporting” of input tax credit. “Short reporting” occurs when the ITC claimed in the monthly return forms is more than what is reported in the annual return form.
Short reporting” happens when the input tax credit in the annual return form, or GSTR-9, is less than the input tax credit claimed in the monthly form–GSTR-3B or GSTR 2B. The GSTR-3B is generally a self-declared summary of the GST return filed every month, where taxpayers need to report the summary figures of sales, ITC claimed, and net tax payable. GSTR-2B is an auto-drafted form which provides eligible and ineligible ITC for each month.
Most of the notices were sent in January for the April to November period of 2023-24. However, businesses and experts have expressed concern that some notices are sent mechanically, without proper verification, leading to increased compliance burden. Central Board of Indirect Taxes and Customs chairman Sanjay Kumar Agarwal emphasized that the department cannot ignore an ITC mismatch when it occurs in the system.
Read more at: Top reasons for which you could receive an income tax notice, U/s 143(1), 142(1), 139(1), 143(2), u/s 156, Section 245
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Read more at: A COMPLETE GUIDE TO INPUT TAX CREDIT (ITC) UNDER GST