Detailed analysis on New Rule 88D of CGST Rules,2017-Notification No.38/2023-CT.Dated.4th August,2023
CBIC has implemented a significant change through Notification No.38/2023-Central Tax, dated 4th August,2023, based on the Council’s recommendation. This change pertains to the inspection of Rule 88D after Rule 88C, titled “Manner of dealing with the difference in input tax credit available in auto-generated statement containing the details of input tax credit and that availed in the return.” These changes will be effective from August 4th, 2023. These modifications hold important implications for taxpayers and aim to streamline the process of claiming input tax credit seamlessly.
According to Rule 88D of the CGST Rules,2017, the GSTN Portal will now compare the Input Tax Credit available in Form GSTR-2B with the Input Tax Credit availed in Form GSTR-3B. If a taxpayer claims excess Input Tax Credit in Form GSTR-3B compared to the Input Tax Credit available in Form GSTR-2B, exceeding the prescribed amount and percentage as recommended by the Council, the taxpayer will receive an intimation of this variation through the GSTN Portal and their registered email address in PART-A of Form DRC-01C.
Upon receiving this intimation, the taxpayer has two options to address the variance in ITC between Form GSTR-2B and Form GSTR-3B.
Option 1: If the taxpayer verifies their books of accounts and documentary evidence, and finds a variation between Form GSTR-2B and Form GSTR-3B, they must rectify the excess claimed Input Tax Credit by using Form DRC-03, along with interest as per Section 50.
Option 2: If the taxpayer has thoroughly reviewed their books of accounts and GSTR returns for the respective tax periods (Form GSTR-3B vs. Form GSTR-2B), and is confident in the accuracy of their records and documentary evidence, they can provide a reasonable explanation along with the supporting documentation. This should be submitted through PART-B of Form DRC-01C via the GSTN Portal within 7 days from the date of receiving the intimation, or by mailing it to the concerned officer.
These changes represent a significant step towards ensuring accurate input tax credit claims and fostering better compliance within the GST framework.
“FORM GST DRC-01C- PART-A (System Generated)
Intimation of difference in input tax credit available in auto-generated statement containing the details of input tax credit and that availed in return
Ref No:
GSTIN:
Legal Name:
Date:
1. It is noticed that the input tax credit availed by you in the return furnished in FORM GSTR-3Bexceeds the amount of input tax credit available to you in accordance with the auto generated statement containing the details of input tax credit made available to you in FORM GSTR-2Bfor the period by an amount of Rs. …………… .
The details thereof are as follows: Form Type Input tax credit available / availed (in Rs.) IGST CGST SGST/UTGST Cess Total FORM GSTR-2B FORM GSTR-3B Excess input tax credit availed.
| Form Type | Input Tax Credit available / availed in Rupees | ||||
| IGST | CGST | SGST /UTGST | CESS | TOTAL | |
| FORM GSTR-2B | |||||
| FORM-GSTR3B | |||||
| Excess Input Tax Credit Availed | |||||
2. In accordance with sub-rule (1) of rule 88D, you are hereby requested to either pay an amount equal to the said excess input tax credit, along with interest payable under section 50, through FORM GST DRC-03 and furnish the details thereof in Part-B of FORM GST DRC-01C, and/or furnish the reply in Part-B of FORM GST DRC-01C incorporating reasons in respect of that part of the excess input tax credit that has remained to be paid, within a period of seven days.
3. It may be noted that where any amount of the excess input tax credit remains to be paid after completion of a period of seven days and where no explanation or reason for the same is furnished by you or where the explanation or reason furnished by you is not found to be acceptable by the proper officer, the said amount shall be liable to be demanded in accordance with the provisions of section 73 or section 74, as the case may be, of the Act.
4. This is a system generated notice and does not require signature.
PART-B
Reply by Taxpayer in respect of the intimation of difference in input tax credit.
Reference No. of Intimation:
Date:
A. I have paid the amount equal to the excess input tax credit, as specified in Part A of FORM GST DRC-01C, fully or partially, along with interest payable under section 50, through FORM GST DRC-03, and the details thereof are as below:
| ARN OF FORM GST DRC-03 | PAID UNDER HEAD | TAX PERIOD | IGST | CGST | SGST/UTGST | CESS | INTEREST |
| Total |
AND/OR
B. The reasons in respect of that part of the excess input tax credit that has remained to be paid are as under:
|
S.NO |
BRIEF REASONS FOR DIFFERENCE | DETAILS (MANDATORY) |
| 1 | Input tax credit not availed in earlier tax period(s) due to non-receipt of inward supplies of goods or services in the said tax period (including in case of receipt of goods in instalments). | |
| 2 | Input tax credit not availed in earlier tax period(s) inadvertently or due to mistake or omission | |
| 3 | ITC availed in respect of import of goods, which is not reflected in FORM GSTR-2B | |
| 4 | ITC availed in respect of inward supplies from SEZ, which are not reflected in FORM GSTR2B | |
| 5 | Excess reversal of ITC in previous tax periods which is being reclaimed in the current tax period | |
| 6 | Re-credit of ITC on payment made to supplier, in respect of ITC reversed as per rule 37 in earlier tax period. | |
| 7 | Re-credit of ITC on filing of return by the supplier, in respect of ITC reversed as per rule 37A in earlier tax period. | |
| 8 | FORM GSTR-3B filed with incorrect details and will be amended in next tax period (including typographical errors, wrong tax rates, etc.) | |
| 9 | Any other reasons (Please specify) |
Verification
I _________________________________________ hereby solemnly affirm and declare that the information given hereinabove is true and correct to the best of my knowledge and belief and nothing has been concealed therefrom.
Signature of Authorised Signatory
Name:
Designation/Status:
Place:
Date:
If the taxpayer failed to pay difference of Input Tax Credit between Form GSTR-2B vs. Form GSTR-3B , the jurisdictional officer has issued an intimation for amount recoverable under Section79 of the CGST Act,2017.
FORM GST DRC –01D [See rule 142B]
Intimation for amount recoverable under section 79 Reference No. – Date1. Details of intimation: (a) Financial year: (b) Tax period: From — To ——–
2. Section(s) of the Act or rule (s) under which intimation is issued: < Drop down or check box for section 75 (12) r/w 79 may be provided——
3. Details of tax, interest or any amount payable: (Amount in Rs.)
| Tax Period | Act | Place of Supply | Tax | Interest | Penalty | Fee | Others | Total | |
| From | To | ||||||||
You are hereby directed to make the payment within seven days failing which proceedings shall be initiated against you to recover the outstanding dues as per the provisions of section 79 of the Act.
Signature:
Name:
Designation:
Addresses:
To
GSTIN/ID
Name:
Address:
Note: 1.Only applicable fields may be filled up.”
Conclusion: The changes introduced by Rule 88D of CGST Rules, 2017, signify a substantial step towards ensuring precise input tax credit claims and fostering better compliance within the GST framework. This meticulous procedure demands taxpayers’ attention and encourages accurate record-keeping and transparent reporting to maintain compliance with the evolving tax regulations. These measures will ultimately contribute to a more efficient and transparent taxation system.
Note: The article includes format of from “FORM GST DRC-01C- PART-A” and “FORM GST DRC-01D.”
Author Bio
