March 21, 2023

Grounds of Appeal against disallowance of Mismatch between GSTR-3B & GSTR-

If a taxpayer's input tax credit (ITC) is disallowed due to a mismatch between the GSTR-3B and GSTR-2A, the taxpayer has the right to file an appeal against the disallowance. The grounds of appeal may vary based on the facts and circumstances of each case, but some common grounds of appeal are:

Discrepancy in the data: The taxpayer can argue that the discrepancy in the data between the GSTR-3B and GSTR-2A is due to a technical error or mismatch in the data entry and that there is no intentional suppression or misreporting of the ITC.

Mismatch due to delayed filing: The taxpayer can argue that the mismatch is due to the delay in the filing of the GSTR-1 by the supplier and that the ITC should not be disallowed for the delay caused by the supplier.

Validity of ITC claim: The taxpayer can argue that the ITC claimed is genuine and valid, and that there is no reason for the disallowance of the ITC.

Procedural lapses: The taxpayer can argue that there were procedural lapses on the part of the GST officer in disallowing the ITC, such as non-compliance with the principles of natural justice, non-adherence to the timelines prescribed under the GST law, or non-communication of reasons for disallowance.

Precedents and case law: The taxpayer can rely on previous judgments or case law to argue that the disallowance of ITC is not in line with the principles of law and should be reversed.

These are some common grounds of appeal that a taxpayer can use to challenge the disallowance of ITC due to a mismatch between the GSTR-3B and GSTR-2A. However, it is important to note that the specific grounds of appeal and the success of the appeal will depend on the facts and circumstances of each case. It is recommended that the taxpayer seeks professional advice from a tax expert or a chartered accountant for specific advice on filing the appeal.

Eligibility and conditions for taking input tax credit.

Input tax credit (ITC) is a key feature of the Goods and Services Tax (GST) regime in India. It allows taxpayers to claim credit for the GST paid on the purchase of goods and services used for business purposes. However, there are certain conditions and eligibility criteria that must be met to claim ITC. These are:

1. Registered under GST: The taxpayer must be registered under GST to claim ITC.

Goods and services used for business: The goods and services on which GST is paid must be used for business purposes. ITC cannot be claimed for goods and services used for personal or non-business purposes.

2. Tax invoice: The taxpayer must have a valid tax invoice or debit note for the goods or services on which GST has been paid.

3. Receipt of goods or services: The taxpayer must have received the goods or services on which GST has been paid.

4. Tax paid and returns filed by supplier: The supplier of goods or services must have paid the tax to the government and filed the GST returns for the same.

5. Time limit for claiming ITC: The taxpayer must claim ITC within the prescribed time limit, which is two years from the date of the invoice or filing of the annual return, whichever is earlier.

6. Blocked credit: There are certain goods and services for which ITC is not allowed, such as motor vehicles, food and beverages, membership of a club, and beauty treatment.

7. Reverse charge: If the recipient is liable to pay tax under the reverse charge mechanism, ITC can be claimed only after the tax is paid.

It is important for taxpayers to meet these conditions and eligibility criteria to claim ITC. Failure to comply with the requirements may result in the disallowance of ITC or even penal action by the GST authorities.


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