GSTR1 submitted but not filed by supplier, eligible for ITC ?

Great question! Here’s a clear explanation for your situation:

Issue:

• Supplier uploaded invoices in GSTR-1 for July-Sept 2019, but did not file the return on time.

• You availed ITC based on these invoices appearing in your GSTR-2A.

• Supplier filed that GSTR-1 only later (in March 2021) — after you filed your annual return (Feb 2021).

• You found a difference in ITC in column 8 of your Annual Return 2019-20.

• Supplier has since filed all other returns correctly.

What does the law say about this?

• Section 16(2) of the CGST Act: ITC can be claimed only if the supplier has uploaded the invoice in GSTR-1 and filed the return.

• Section 41 & 42: Matching of ITC between supplier and recipient is important.

• If the supplier fails to file GSTR-1 timely, recipient may have to reverse the ITC claimed and pay interest.

Your case:

1. You claimed ITC when invoices were uploaded but GSTR-1 was not filed by the supplier.

2. Supplier later filed the missing GSTR-1 after your annual return.

3. You have not received any notice yet.

Eligibility of ITC:

• Since supplier has eventually filed the missing GSTR-1, the invoices are now legally valid.

• However, the delay means the ITC claim was not fully matched and validated earlier, causing mismatch in annual return.

• Technically, ITC should be reversed if the supplier did not file GSTR-1 timely, but since supplier has now filed:

  • You may be allowed to keep the ITC.

  • But if the department issues a notice, you might need to pay interest on delayed reversal and re-claim ITC later.

What you should do:

• Keep evidence of supplier’s eventual filing of GSTR-1.

• Maintain communication with supplier for any rectification or confirmation.

• Monitor GST portal for any notices.

• If a notice arrives, be ready to explain the situation and pay interest if required.

• You may also consult a GST professional to prepare a response.

Summary: