Point to be considered on these days notice served under sec.73 and 74 of CGST Act, 2017 (here Section 73 of the CGST Act, deals with the cases where any taxes has not been paid or short paid or erroneously refunded, or where input tax credit has been wrongly availed or utilised for any reason, other than the reason of fraud or any wilful misstatement or suppression of facts to evade tax and section 74 of CGST Act, deals with determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised by reason of fraud or any wilful misstatement or suppression of facts) for reversal of ITC not reflecting in GSTR-2A and it’s considered fraudulent claim with charging 24% Interest rate on such reversal.

GST issues on ITC Mismatch

Here the point is If Assessing officer considered that supplier not paid GST in respect of such invoice it should be liable to pay 18% interest on such outward supplies that means Department charge 42% interest on single tax liability ( 18% from supplier + 24 % form receipent) but on the other hand they said interest liability can not exceed 24% (Here the section deals with interest liability is Section 50(3) which is said that a taxable person who makes an undue or excess claim of input tax credit under sub-section (10) of section 42 or undue or excess reduction in output tax liability under sub-section (10) of section 43, shall pay interest on such undue or excess claim or on such undue or excess reduction, as the case may be, at such rate not exceeding twenty-four per cent., as may be notified by the Government on the recommendations of the Council)and the other point is that if the assessing officer deny only on the ground that bill not upload on GSTR-1 but it was paid by supplier correctly in GSTR-3B so here is a injustice for receipent for reversal of ITC.

In my point of view it is better that considered that ITC as a “Disputed ITC” and block it for the period as may be prescribed on the recommendations of the council and send the notice under section 61 of CGST Act, 2017 to supplier for Assess their outward tax liability and after completion of such assessment the credit of recipient should be release .

Author Bio

Qualification: LL.B / Advocate
Company: N/A
Location: MEERUT, Uttar Pradesh, India
Member Since: 10 Sep 2020 | Total Posts: 1

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  1. SRIKANTH D says:

    Our Company is a Importer but after GST we are unable to utilise IGST on Imports because of Non updation from ICEGATE site What to do even though we tried customer care numbers, mailed to them and report to GST portal also by giving details of BE etc., but bill there is no response or show of IGST ON IMPORTS RECEIVED IN OUR GST NUMBER


    A good point is raised that the recipient is put in injustice if GSTR-3B is correctly declared all the supplies by the supplier. But how you would ascertain that 3B is included all the supplies made unless reflected in GSTR-1. The audit officer just compare the 2A of the recipient and R1 of the supplier. The burden of proof lies on the recipient to prove that 3B is included all his receipts. It is ascertainale only with the auto populated figures.
    In case of audit of supplier, GSTR and 3B are compared for outward supplies. Any excess tax paid will not consider for undeclared supplies in R1. 3B once filed is final. so excess paid tax may treat as unauthorised collection of tax. A solution is needed to clear the anomaly.


      That’s actually Here is the problem with Assessing officer They assess tax liability of receipent where’s mistake made in hand of supplier . Note should be send on both side on same time.

  3. CA Daljeet Singh Virdi says:

    If the ITC wrongly availed but not utilised and on reversal carries no interest liability with recent amendment wef 1st January 2022

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February 2024