Several companies have received notices from Goods and Services Tax (GST) authorities regarding discrepancies in their claimed input tax credit (ITC), according to sources familiar with the situation. This follows a thorough examination of the input tax credited by these companies, which revealed disparities with their annual returns. The notices have been issued under Section 150 of the CGST Act, 2017, requiring taxpayers to submit an information return detailing the reasons for the “short reporting” of input tax credit. “Short reporting” occurs when the input tax credit declared in the annual return form (GSTR-9) is lower than that claimed in the monthly forms (GSTR-3B or GSTR 2B). “Several notices have instructed taxpayers to reverse even unclaimed ITC in GSTR-3B mechanically, without any critical analysis,” commented one expert, questioning the rationale behind reversing unclaimed ITC.

Source: Economic Times February 07, 2024 09:11 UTC