Question ID : 44584

082701

GST department has issued demand notice to an assessee for Rs 5 Lacs GSt +Interest+Penality for the reason that GSTR1 filed by selling parties does not reflect Input credit availed by party in GSTR 3B. Financial year 2018-19 As per GSTR2A of that year Input credit almost matches except for an amount claimed of previous year 2017-18 in which year Fig in GSTR 2A was more than Input claimed in 2017-18 How can they issue showcause notice when comparing of Input credit availed in 3B with GSTR 2A was the rule in that period

Answer ID : 85261

Notice is being served within their jurisdiction and to prevent time barring. Appropriate ruling to support your ITC is already available

Answer ID : 85329

Till 31.12.2021, there was no express provision in the GST Act to look into GSTR-2A for availing the Input Tax Credit. This restriction of availing the ITC based on the GSTR-2A was placed in Rule 36(4) of the CGST Rules 2017 w.e.f. 9th October 2019. Rule 36(4) was amended many times [20%, 10%, 5%, 0%] Rule 36(4) is considered to be Ultravires to the GST Act, in the absence of a specific provision in the Act till 31.12.2021. Thereby, Demand of GST Dept to reverse the ITC which is not reflected in 2A may not be right. Further, in this regard CBIC has issued Circular No 183 which provided to obtain a declaration from the Vendors and their CA's depending on the tax amount involved (less or more than 5 Lakhs) In connection to this, following judgments can be relied upon: D.Y. Beathel Enterprises vs. the State tax Officer (Data Cell) [2021-TIOL-890-HC-MAD-GST] and many more........

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