Notices of discrepancy of ITC in GST ASMT-10 have been issued by the GST department in the past. The said notice sought an explanation from the taxpayers for the difference between ITC claimed in GSTR-3B and ITC available in GSTR2A/2B.
 
The important question was, “whether input tax credit can be denied merely on the ground of a mismatch between ITC availed in GSTR-3B with that reflected in GSTR-2A/2B.“
 
Let’s find the answer to the above question through the following 7 points:-

1. ITC matching mechanism as given under Section 42 r/w rule 69 is not in effect yet.
2. Section 43A provides for the procedure of availing ITC in a manner prescribed (as per rules)
3. ON 18.10.2018, CBIC in its press release ““Furnishing of outward details in FORM GSTR-1 by the corresponding supplier(s) and the facility to view the same in FORM GSTR-2A by the recipient is in the nature of taxpayer facilitation and does not impact the ability of the taxpayer to avail ITC on the self-assessment basis”.

4. Rule 36(4) was inserted with effect from. 09.10.2019. Therefore, effectively no matching of ITC was required up to 08.10.2019.
5. Notification No. 49/2019-Central Tax dated 09.10.2019. It said, “36(4) Input tax credit to be availed by a registered person in respect of invoices or debit notes, the details of which have not been uploaded by the suppliers under sub-section (1) of section 37, shall not exceed 20 per cent of the eligible credit available in respect of invoices or debt notes the details of which have been uploaded by the suppliers under sub-section (1) of section 37.”
6. Section 16(2) of the CGST Act contains the conditions to avail of the ITC. In Finance Act 2021, A New condition is inserted under section 16(2) under clause (aa). stating that “(aa) the details of the invoice or debit note referred to in clause (a) has been furnished by the supplier in the statement of outward supplies, and such details have been communicated to the recipient of such invoice or debit note in the manner specified under section 37.” In simple words “a registered person would not be eligible to avail the ITC on an invoice unless the same is reflecting in Form GSTR-2B of the registered person” But this new condition was to be made effective from the date to be notified.

7. The new condition under section 16(2)(aa) was made effective from 1-1-2022 vide Notification No. 39/2021-Central Tax dated 21-12-2021.

Hence this is how we find the answer, NOW input tax credit can be denied merely on the ground of a mismatch between ITC availed in GSTR-3B with that reflected in GSTR-2A/2B.

Reason for mismatch between in ITC GSTR3B vs GSTR2A/2B:-

The following reasons may be responsible for the mismatch showing short or excess credit-

• The credit of IGST is wrongly claimed on the import of goods.
• IGST Credit wrongly claimed on the import of services.
• Error Transitional credit was claimed in TRAN – I and TRAN – II.
• ITC for goods and services received in last year but availed in CY.
• In case the supplier has not recorded the outward supplies in Form GSTR–1, communication can be sent out to the supplier to ensure that the discrepancies are corrected.
• Some invoices have been missed/recorded more than once.
• Fake invoice issued by the fake supplier.
• The period of invoice and ITC claim are different.

GST authorities have issued notices to a large number of taxpayers asking them to reconcile the ITC claimed in a self-declared summary return Form GSTR – 3B with the auto-generated Form GSTR-2B/GSTR – 2A. Such notices are issued in Form GST ASMT – 10. The taxpayer would be required to reply to such notices or pay the differential amount. Claiming ITC on the basis of a fake invoice is punishable. Hence ensures that credit is being claimed for the tax which has been actually paid to the supplier.Find the reason for mismatch and get it corrected. 
Any discrepancies found in Form GSTR – 2A/2B and GSTR -3B leading to any excess ITC claimed by the recipient, the same must be paid by the taxpayer along with interest. Hence it is necessary to do reconcile exercises on a regular basis to ensure that only bonafide input tax credit is claimed. Even at the time of filing an Annual return in Form GSTR – 9, reconciliation of ITC as per GSTR – 3B and GSTR – 2A/2B is required to be done.