Application of 16(c )

If a taxpayer has under-reported his ITC for a month/quarter and wants to claim it, he/she can avail it in the return of the following period i.e. month/quarter. Only GSTR 3B’s needs to be changed and in that the required ITC can be added, in the following month.

For example: If A has mistakenly not considered a few of his purchases in a month then he can do so in the following month’s purchases and along with it, the ITC can be availed.

No actions required in GSTR 1 or 2

When ITC has been over-reported then the taxpayers need to reverse such excess ITC with interest in the following month/quarter. No need to change anything in GSTR 1.

Another situation can be if a taxpayer has over-claimed the Input Tax Credit and is also used the same then, the taxpayer needs to adjust or pay the same along with the appropriate interest duly in GSTR 3B in the following month/quarter

Dear sir

We have taken credit on the basis of GSTR2A, now the department tells that party has taken invalid credit in GSTR 3B, and according to Section 16(C), it is not valid for us to take credit on the basis of GSTR 2A. further to this they have also imposed penalty and interest.

 

Now My question is, How we are responsible for suppliers return. We have reimbursed taxes to them, Party has filed GSTR1, GSTR3B and annual return too.

How can we know about their ITC ledger. 

 

Actually it is the fault of the supplier for this reason as your supplier is nor rectifying it so department add the amount with your output tax liability and penalty is imposed on you. but there is solution
Now, if the supplier rectifies the discrepancy through debit note or invoice within the specified time frame the amou will again be allowed as ITC and the amount paid as interest will be refunded.

The department has started with the concept of GSTR 2B for this purpose only. 

The taxpayers shall be allowed to take that much credit only which is reflecting in GSTR 2B. GSTR 2B will always remain the same.