GSTR-2A Mismatch Alone Cannot Deny Supported ITC: GSTAT Bengaluru

By CA Sandeep Kanoi Goods and Services Tax Judiciary October 24, 2026

TaxGuru Citation: 2026 taxguru.in 16771
Case Name: Sandvik Coromant India Private Limited Vs Commissioner of Commercial Taxes (GSTAT Bengaluru)
Appeal Number: Only available for paid members
Date of Judgement/Order: Only available for paid members
Courts: Bengaluru GSTAT, GSTAT

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Sandvik Coromant India Private Limited Vs Commissioner of Commercial Taxes (GSTAT Bengaluru)

Summary: The GST Appellate Tribunal, Bengaluru Bench, partly allowed the appeal of Sandvik Coromant India Private Limited against the order dated 26 November 2025 concerning the tax period April 2019 to March 2020. The case arose from an audit and subsequent adjudication under Section 73(9) of the CGST and KGST Acts. The appeal concerned differences between GSTR-2A and GSTR-3B, alleged unaccounted inward supplies, interest on purchase-return input tax credit reversal, and credit notes omitted from GSTR-1.

On the first issue, the authorities had disallowed ITC of ₹3,96,226 on the ground that invoices were not reflected in GSTR-2A. The Tribunal examined the underlying invoices, supplier filings, reconciliation statements and import documents. It found that credit pertaining to Golden Palms Hotel & Spa was supported by individual invoices underlying a consolidated tax summary, while certain other invoices and IGST on imported goods were supported by the relevant records.

The Tribunal restored ITC of ₹3,44,974, comprising IGST of ₹95,588, CGST of ₹1,24,693 and SGST of ₹1,24,693. However, it upheld disallowance of ₹51,255, comprising IGST of ₹2,721 and CGST and SGST of ₹24,267 each, relating to four invoices for which the appellant did not furnish adequate evidence of supplier tax payment. It distinguished mere GSTR-2A non-reflection from failure to prove substantive eligibility under Section 16(2)(c), referring also to Circular No. 183/15/2022-GST.

The second issue concerned a demand of approximately ₹28.45 lakh arising from 46 e-way bills allegedly absent from the purchase register. The Department had treated these inward movements as deemed outward supplies by adding a gross profit margin of 10%. The Tribunal considered the reconciliation and import movement records and set aside the demand and associated interest, rejecting the addition based on the unaccounted inward-supply allegation.

On the third issue, the appellant had reversed input tax credit of approximately ₹1.04 lakh through Form DRC-03 before the show-cause notice. The Tribunal set aside interest of ₹27,530 under the KGST Act and the related penalty, while appropriating the tax already paid. On the fourth issue, it also set aside the ₹99,718 tax demand, interest and penalty concerning credit notes issued for sales returns but not reported in Form GSTR-1.

Accordingly, the appeal was partly allowed and the first appellate order modified. The Tribunal directed payment of the sustained ₹51,255 ITC disallowance with interest under Section 50(3) read with Rule 88B and penalty under Section 73(9). All other disputed demands addressed in its operative order were set aside as specified. The order was pronounced on 14 October 2026 by Judicial Member Prabhakaran P M and Technical Member Ravi Jesuraj S.

Ultimately, the GSTAT Bengaluru granted substantial relief to Sandvik Coromant India Private Limited by setting aside the demands founded on reconciled e-way bill transactions, accepted ITC documentation, disputed interest and the credit-note issue, while sustaining the limited ITC disallowance of ₹51,255. The Tribunal’s approach emphasised the distinction between discrepancies appearing in GST returns or electronic records and legally sustainable findings of unaccounted supplies or inadmissible credit. Although GST authorities may rely on e-way bill information, return mismatches and other electronic data to identify potential irregularities, the resulting demands must be supported by examination of relevant records and the applicable statutory provisions. Equally, taxpayers seeking ITC or reductions in output tax liability must establish their eligibility through proper documentation and compliance with statutory conditions. The ruling is significant for GST audit and adjudication disputes involving GSTR-2A/GSTR-3B reconciliation, e-way bill verification, estimated sales, purchase returns, interest liability and credit-note adjustments.

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