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Understand the impact of Rule 88D and Form DRC-01C in dealing with differences between GSTR-2B and GSTR-3B. Learn about the notification, process, and implications for businesses. Stay compliant with the latest Central Goods and Services Tax (CGST) Rules, 2023.

GSTR -2B Vs GSTR-3B-

Central Board of Indirect Taxes and Customs vide Notification No. 38/2023 has notified the CGST Rules, on 4th August 2023 These rules may be called the Central Goods and Services Tax (Second Amendment) Rules, 2023.

CBIC notified Rule 88D to prescribe the manner of dealing with difference in Input Tax Credit available in GSTR-2B and availed in GSTR-3B.

After rule 88C, the following rule shall be inserted, namely

Rule. 88D. Manner of dealing with difference in input tax credit available in autogenerated statement containing the details of input tax credit and that availed in return.-

(1) Where the amount of input tax credit availed by a registered person in the return for a tax period or periods furnished by him in FORM GSTR-3B exceeds the input tax credit available to such person in accordance with the auto-generated statement containing the details of input tax credit in FORM GSTR-2B in respect of the said tax period or periods, as the case may be, by such amount and such percentage, as may be recommended by the Council, the said registered person shall be intimated of such difference in Part A of FORM GST DRC-01C, electronically on the common portal, and a copy of such intimation shall also be sent to his e-mail address provided at the time of registration or as amended from time to time, highlighting the said difference and directing him to—

(a) pay an amount equal to the excess input tax credit availed in the said FORM GSTR-3B, along with interest payable under section 50, through FORM GST DRC-03, or

(b) explain the reasons for the aforesaid difference in input tax credit on the common portal, within a period of seven days.

(2) The registered person referred to sub-rule (1) shall, upon receipt of the intimation referred to in the said sub-rule, either, (a) pay an 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 furnish the details thereof in Part B of FORM GST DRC-01C, electronically on the common portal, or (b) furnish a reply, electronically on the common portal, incorporating reasons in respect of the amount of excess input tax credit that has still remained to be paid, if any, in Part B of FORM GST DRC-01C, within the period specified in the said sub-rule.

(3) Where any amount specified in the intimation referred to in sub-rule (1) remains to be paid within the period specified in the said sub-rule and where no explanation or reason is furnished by the registered person in default or where the explanation or reason furnished by such person 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.

Impact of the above Notification:-

The System shall compare the ITC available in GSTR-2B with ITC Availed in GSTR-3B for a Tax Period or Tax Periods Submitted by the dealer. It is an auto generated Statement containing the details of GSTR-2B Vs GSTR-3B.

If found any ITC Claimed in GSTR-3B Excess of Form GSTR2B in any period or periods, the 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 of the period The Intimation DRC-01C  shall be forwarded  through the Registered E-mail id provided by the Dealer at the time of Registration.

The Taxpayer if agree the Difference they need to pay the amount equal to the excess input tax credit availed in GSTR-3B along with the with interest section 50, through FORM GST DRC-03 or The Taxpayer required to communicate his reply in Part B of From DRC-01C within 7 Days.

Further if the Proper officer not satisfied with the reason furnished by the taxpayer 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.

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In Case of any observation or Clarifications, the Author can be reached at prakashcanwin@rediffmail.com

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