Mismatch on Supplier’s details and Recipient details. How to settle ITC under GST in India?
As we have explained earlier, input tax credit is sanctioned mainly by cross checking outward details furnished by supplier in his valid GST return. (Valid here mainly means with GST payment). So any Input Tax credit is settled based on the details filed by supplier and details verified by the recipient. If both details of same transaction get tallied, the input tax credit can be settled immediately electronically.
ITC would be confirmed only if the inward details filed by the recipient are matched with the outward details furnished by the supplier in his valid return. What happens if there is a mismatch?
This could happen common among who claim for ITC of GST. As one of the main features of GST tax system is that all entries are electronic system of arrangements and the details can be verified and found errors or discrepancy if any immediately. The e-ledger of supplier and recipient can be easily reconciled within seconds.
As per GST Law, in case of mismatch between the inward and outward details, the supplier would be required to rectify the mis-match within a period of two months and if the mis-match continues, the ITC would have to be reversed by the recipient.
So, if the supplier could not find or does not rectify the discrepancy in inward and outward details of GST tax and return details, the GST authorities treats as mis match of inward and outward supplies and the Input Tax Credit is reversed by the recipient of supply.
So, any Input Tax Credit claim, the valid GST tax return details of inward supplies and outward supplies have to be matched. (I remember, Double Entry system of book keeping here – If there is a debit entry, there is a credit entry. But here, value of transaction changes)
Input Tax Credit claim procedures and formalities with mis-match of inward and outward supply of GST tax returns are explained in this post. If you have more information and views about mis-match of supplier’s e-ledger with recipient’s e-ledger in terms of inward and outward supplies, please share below:
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