CAclubIndia LogoBooks
Academy Books Coaching CCI PRO My Orders

GST ITC Draft Replies & Internal Controls

by Adv. Nitin Sharma, CA. Pooja Garg , Pranjal Arora

GST ITC Draft Replies & Internal Controls

by Adv. Nitin Sharma, CA. Pooja Garg , Pranjal Arora

CONTENTS AT A GLANCE

Preface to the Second Edition 5
Disclaimer 7
About the Authors 9
Detailed Contents 12
Chapter 1 Introduction 1
Chapter 2 Blueprint of Drafting 2
Chapter 3 ITC Related Notices and Draft Replies 61
Chapter 4 Digest of Important Judgments 236
Chapter 5 Control Chart —Eligible/Ineligible with Reversal and Blocked ITC 304
Chapter 6 Internal Control and Reconciliations 319
Chapter 7 FAQ on New Format of GSTR 3B 340
Chapter 8 Accounting Entries and ITC Documentations 348
Chapter 9 Relevant CGST Act, Rules and Circulars on ITC 372

DETAILED CONTENTS

Preface to the Second Edition 5
Disclaimer 7
About the Authors 9
Contents at a glance 11

Chapter 1

Introduction

Chapter 2

Blueprint of Drafting

1. Blueprint of Efficacious Drafting 3
2. Drafting for GST Notices 6
3. Show Cause Notice 14
4. Checklist before drafting a reply to Show Cause Notice 14
5. Primary objection to Show Cause Notice 16
6. Important Note regarding Extension of Limitation During Covid-19 Period 18
7. Reply to SCN 20
8. Note regarding the Use of Paper in drafting and pleading 23
9. Legal Maxims 25
10. Master Circular on Show Cause Notice, Adjudication and Recovery — reg. 27

Chapter 3

ITC Related Notices and Draft Replies

1. Draft Reply for GSTR 2A V/S GSTR 3B – Before 09.10.2019 63
2. Draft Reply for GSTR 2A V/S GSTR 3B – [From 9.10.2019 to 31.12.2021] 67
3. Draft Reply for GSTR 2A V/S GSTR 3B – [1.1.2022 to 30.09.2022] 72
4. Draft Reply for reversal of ITC taken on expenses which is obligatory for the employer 77
5. Draft Reply for Notice issued for reversal of ITC claimed on maintenance of housing colony 81
6. Draft Reply for DRC01A/DRC01 issued for payment of liability in cash which was reported in the next period and offset with that month’s ITC 84
7. Draft Reply for issue contained in Notice/Audit para for payment of ITC claimed after time limit of section 16(4) 86
8. Draft reply for non-reversal of ITC on goods lost in manufacturing process 91
9. Draft Reply to Issue raised under Audit Para on Sale of Capital Goods 95
10. Draft Reply on Notice issued for reversal of ITC availed on CSR Activities 99
11. Draft Reply for non-reversal of ITC availed on the gift to employees more than `50,000 103
12. Draft reply of notice issued for reversal of RCM ITC on grounds of time barring under Section 16(4) 106
13. Draft reply on notice issued for the payment of interest on gross tax liability on occasion of late filing of GSTR 3B. 110
14. Draft reply for SCN denying ITC on rent a cab services u/s 17(5). 113
15. Draft Reply for ITC disallowed because of retrospective cancellation of registration of Supplier 116
16. Draft Reply against SCN for Penalty u/s 125 for late filing of GSTR 3B 121
17. Draft Reply for Reversal of ITC as per Rule 42 on account of sale of MEIS Scrip prior to 05.07.2022 125
18. Reversal of ITC on exempt supply/NIL Rated outward Supplies as per Rule 42/43 129
19. Draft Reply for Notice on ITC and Depreciation both taken on Capital Goods 134
20. Draft Reply on denial of ITC on Import of Goods taken without auto- population of ITC in GSTR 2A/2B 137
21. Draft Reply for ITC disallowance on account of non-payment of taxes by supplier to the Government 140
22. Draft Reply on Notice for Reversal of ITC on Debit Note issued prior to 1.1.2021 145
23. Draft Reply on Notices issued for non-compliance of Rule 86B 150
24. Draft Reply on ITC blocked u/s 17(5) for goods distributed free of cost under Sales Promotion Scheme 156
25. Draft reply for denial of IGST ITC pertaining to RCM liability discharged on renting of guesthouse for employees - for the period after 18.07.2022 159
26. Draft Reply for notice on ITC excess claimed 163
27. Draft reply of notice of Reversal of ITC availed on Bill to Ship to Model for Services 166
28. Draft Reply on reversal of ITC as Book Adjustment is not Actual Payment 170
29. Draft Reply to Notice issued for excess claimed of ITC on account of amendment in credit note by the supplier 174
30. Draft reply to the notice issued for reversal of ITC of one product which is used for another Taxable Supply 178
31. Draft Reply on reversal of ITC in absence of E Invoice 182
32. Draft Reply for notice issued where ITC is used instead of cash for payment of Pre-deposit towards Appeal 185
33. Draft Reply for ITC in case of Export of Exempted Items 189
34. Draft Reply for reversal of ITC availed on Dumper/Forklift under section 17(5) of the CGST Act 193
35. Draft Reply for reversal of ITC on purchase of Demo Car under section 17(5) of the CGST Act 196
36. Draft reply on Notice received for reversal of ITC on Mobile Phones used by employees 199
37. ITC has been taken correctly as IGST but the supplier has reported wrongly as CGST & SGST 202
38. Draft reply for Notice issued for ITC reversal as per Circular 170/02/2022 – GST Dated 06th July, 2022 206
39. Draft Reply for ITC reversal on Input Service Distributor 212
40. Draft reply for Non Payment to the supplier within 180 days 214
41. Draft reply for Notice issued for ITC reversal as per Circular 170/02/2022 – GST Dated 06th July, 2022 220
42. Draft reply on notice issued for cash payment of wrongly availed ITC of CGST and SGST 226
43. Draft reply on notice issued for Difference of ITC as per E-Way Bill reports and GSTR 3B 229
44. Reply for IGST ITC denial in the scenario where Place of Supply is different than recipient’s registered place of business 232

Chapter 4

Digest of Important Judgments

Chapter 5

Control Chart — Eligible/Ineligible with Reversal and Blocked ITC

Chapter 6

Internal Control and Reconciliations

A. Reconciliations for Internal Control 319
  • 1. Reconciliation of GSTR 2B vs Books of accounts
 320
  • 2. Reconciliation between GSTR 2A vs GSTR 2B
 320
  • 3. EWAY Bill vs Inward Supply Reconciliation
 321
  • 4. Reconciliation of electronic Ledger with Books
 322
B. Internal Control for Input Tax Credit after Section 38 322
  • 1. Section 38(2) of CGST Act
 322
  • 2. Search Taxpayers
 323
    • 1. Show filling Table
 326
    • 2. EWAY Bill History
 326
    • 3. Liability Paid Percentage
 326
    • 4. Show return filling frequency
 329
C. Another internal control for self-scrutiny 329
  • 1. Tax Liability and ITC Comparison
 329
    • Reports 1 – Tax liability other than export and reverse charge
 333
    • Reports 2 – Tax liability due to reverse charge
 334
    • Reports 3 – Tax liability due to Export and SEZ Supplies
 334
    • Reports 4 – Input Tax Credit claimed and due (other than import of goods)
 335
    • Report 5 – Input tax credit calimed and due (import of goods)
 336
    • Reports 6 – Reverse Charge liability declared and input tax credit claimed thereon
 338
  • 2. Communication between Taxpayers
 339

Chapter 7

FAQ on New Format of GSTR 3B

Changes in Reporting Format in GSTR 3B

1. Circular No. 170/02/2022-GST, dated the 6th July, 2022 340
2. Major changes in the GSTR 3B 340
3. GSTR 3B – ITC Tables 342
4. FAQ on reporting in the new format of GSTR 3B 342

Chapter 8

Accounting Entries and ITC Documentations

A. Accounting Entries 348
B. ITC Documentations 364

Chapter 9

Relevant CGST Act, Rules and Circulars on ITC

CGST Act — Relevant provisions

Section 2: Definitions 374
Section 7. Scope of supply 377
Section 16. Eligibility and conditions for taking input tax credit 378
Section 17. Apportionment of credit and blocked credits 380
Section 18. Availability of credit in special circumstances 384
Section 19. Taking input tax credit in respect of inputs and capital goods sent for job work 385
Section 20. Manner of distribution of credit by Input Service Distributor 386
Section 21. Manner of recovery of credit distributed in excess 387
Section 31. Tax invoice 387
Section 34. Credit and debit notes 389
Section 37. Furnishing details of outward supplies 390
Section 38. Communication of details of inward supplies and input tax credit 392
Section 39. Furnishing of returns 394
Section 41. Availment of input tax credit 397
Section 49A. Utilisation of input tax credit subject to certain conditions 397
Section 49B. Order of utilisation of input tax credit 398
Section 50. Interest on delayed payment of tax 398
Section 73. Determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised for any reason other than fraud or any willful-misstatement or suppression of facts 399
Section 74. Determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised by reason of fraud or any willful-misstatement or suppression of facts 400
Section 83. Provisional attachment to protect revenue in certain cases 402
Section 125. General penalty 402
Section 140. Transitional arrangements for input tax credit 402
Section 141. Transitional provisions relating to job work 407
Section 142. Miscellaneous transitional provisions 408
Section 143. Job work procedure 412

CGST Rules — Relevant Rules

Rule 36. Documentary requirements and conditions for claiming input tax credit 414
Rule 37. Reversal of input tax credit in the case of non-payment of consideration 415
Rule 38. Claim of credit by a banking company or a financial institution 416
Rule 39. Procedure for distribution of input tax credit by Input Service Distributor 417
Rule 40. Manner of claiming credit in special circumstances 419
Rule 41. Transfer of credit on sale, merger, amalgamation, lease or transfer of a business 420
Rule 41A. Transfer of credit on obtaining separate registration for multiple places of business within a State or Union territory 421
Rule 42. Manner of determination of input tax credit in respect of inputs or input services and reversal thereof 421
Rule 43. Manner of determination of input tax credit in respect of capital goods and reversal thereof in certain cases 427
Rule 44. Manner of reversal of credit under special circumstances 434
Rule 44A. Manner of reversal of credit of Additional duty of Customs in respect of Gold dore bar 436
Rule 45. Conditions and restrictions in respect of inputs and capital goods sent to the job worker 436
Rule 59. Form and manner of furnishing details of outward supplies 437
Rule 61. Form and manner of furnishing of return 440
Rule 86A. Conditions of use of amount available in electronic credit ledger 443
Rule 86B. Restrictions on use of amount available in electronic credit ledger 444
Rule 88A. Order of utilization of input tax credit 445
Rule 88B. Manner of calculating interest on delayed payment of tax 445

Circulars

Circular No. 31/05/2018-GST, dated 9-2-2018 447
Circular No. 92/11/2019-GST, dated 7-3-2019 449
Circular No. 98/17/2019-GST, dated 23-4-2019 452
Circular No. 123/42/2019-GST, dated 11-11-2019 454
Circular No. 133 03/2020-GST, dated 23-3-2020 457
Circular No. 142/12/2020-GST, dated 9-10-2020 462
Circular No. 170/02/2022-GST, dated 6-7-2022 463
Circular No. 171/03/2022-GST, dated 6-7-2022 469
Circular No. 172/04/2022-GST, dated 6-7-2022 471
Circular No. 174/06/2022-GST, dated 6-7-2022 475
Circular No. 175/07/2022-GST, dated 6-7-2022 478
Circular No. 183/15/2022-GST, dated 27-12-2022 481
Circular No. 184/16/2022-GST, dated 27-12- 2022 485
Circular No. 192/04/2023-GST, dated 17-7-2023 487
Circular No. 193/05/2023-GST, dated 17-7-2023 489
Circular No. 195/07/2023-GST, dated 17-7-2023 493
Circular No. 197/09/2023-GST, dated 17-7-2023 497
Circular No. 199/11/2023-GST, dated 17-7-2023 502

Press Release

Press Release, dated 4-10-2022 506

About the Author

Adv. Nitin Sharma, CA. Pooja Garg , Pranjal Arora

Adv. Nitin Sharma, CA. Pooja Garg , Pranjal Arora

Nitin Sharma-holds a Masters in Commerce and a Bachelors in Law. He is a full-time practicing Advocate in the field of GST, with 19 years of experience in Manufacturing Industries. His extensive expertise encompasses Sales Tax, VAT, Excise, Service Tax, Export-Import and Income Tax. Currently, he serves as a Managing Partner at V & C Law Associates, a Law Firm located in Sikri, Faridabad. The firm provides consultancy and legal services to businesses, ranging from the initial stages of incorporation to establishing internal controls and systems aimed at fostering growth for organisations.

CA. Pooja Garg-CA. Pooja Garg is a qualified Chartered Accountant with more than 18 years of professional experience and a 1st Gen entrepreneur. She is also the Co- Founder of Edukating. She has diverse experience in F&A and providing training to Students, Corporations, and Professionals. She is also a founder of an Ed Startup that provides Skill-Based Training in F&A, Taxation, and related subjects.

Pranjal Arora-Pranjal is a B.Com (Hons.) Graduate from the University of Delhi and, she is also pursuing LL.B. Currently, she is in the Professional Level of the Company Secretary Course. She worked in the Business development field for almost three years and subsequently shifted to Finance and Taxation and has been working in the same for two years now. She has also contributed to the first edition of the GST ITC Book - Draft replies and Internal Controls. She handles GST returns of the clients along with catering to their queries. She is also actively involved in article writing and drafting replies to the notices, orders, letters, and summons received from the Department including the filing of appeals.

View other books from GST
GST ITC Draft Replies & Internal Controls
Publisher: Industry Expert
Pages: 456
Language: English
ISBN: 9788197272455
₹ 1095 Price : ₹ 1395
Price Inclusive of Delivery Charges
Save ₹300 (22% OFF)
Add to Cart
Share :

Have Questions About This Book?

Our course advisors are here to help you make the right decision for your career growth.

Schedule a Call
Live Chat
Other books
Formation, Management & Taxation of Charitable & Religious Trusts & Institutions
Formation, Management & Taxation of Charitable & Religious Trusts & Institutions
Ram Dutt Sharma
CA/CMA INTER COMBO - COLOURED EASY NOTES + QUESTION BANK
CA/CMA INTER COMBO - COLOURED EASY NOTES + QUESTION BANK
CA Aarish Khan
CA/CMA INTER EASY NOTES COLOURED
CA/CMA INTER EASY NOTES COLOURED
CA Aarish Khan
CA/CMA INTER INCOME TAX QUESTION BANK
CA/CMA INTER INCOME TAX QUESTION BANK
CA Aarish Khan
GST (IDT) Book - 4th Edition | May, Sept 2026 & Jan 2027 Attempt
GST (IDT) Book - 4th Edition | May, Sept 2026 & Jan 2027 Attempt
CA Arpita S.Tulsyan
View All Books
Join Us !!

List your Books

Share your knowledge and help shape the next generation of tech-savvy CA & Tax professionals while building a rewarding career in education.

Get Started
WhatsApp
Call Back
Phone
Search