Any registered tax payer notice issued new 88d or drc-01c mismatch itc gstr3b vs gstr2b and itc mismatch every month applicable and reply procedure
Vide notification no. 38/2023 dated 4th August 2023
A new rule 88D, is introduced to deal with the difference in input tax credit as per the auto-generated statement and that availed in the return which states as follows:-
“88D. Manner of dealing with difference in input tax credit available in auto-generated statement containing the details of input tax credit and that availed in return.-
(1) Where the amount of input tax credit availed by a registered person in the return for a tax period or periods furnished by him in FORM GSTR-3B exceeds the input tax credit available to such person in accordance with the auto-generated statement containing the details of input tax credit in FORM GSTR-2B in respect of the said tax period or periods, as the case may be, by such amount and such percentage, as may be recommended by the Council, the said registered person shall be intimated of such difference in Part A of FORM GST DRC- 01C, electronically on the common portal, and a copy of such intimation shall also be sent to his e-mail address provided at the time of registration or as amended from time to time, highlighting the said difference and directing him to—
(a) pay an amount equal to the excess input tax credit availed in the said FORM GSTR-3B, along with interest payable under section 50, through FORM GST DRC-03, or
(b) explain the reasons for the aforesaid difference in input tax credit on the common portal, within a period of seven days.
(2) The registered person referred to sub-rule (1) shall, upon receipt of the intimation referred to in the said sub-rule, either,
(a) pay an amount equal to the excess input tax credit, as specified in Part A of FORM GST DRC- 01C, fully or partially, along with interest payable under section 50, through FORM GST DRC-03 and furnish the details thereof in Part B of FORM GST DRC-01C, electronically on the common portal, or
(b) furnish a reply, electronically on the common portal, incorporating reasons in respect of the amount of excess input tax credit that has still remained to be paid, if any, in Part B of FORM GST DRC-01C, within the period specified in the said sub-rule.
(3) Where any amount specified in the intimation referred to in sub-rule (1) remains to be paid within the period specified in the said sub-rule and where no explanation or reason is furnished by the registered person in default or where the explanation or reason furnished by such person is not found to be acceptable by the proper officer, the said amount shall be liable to be demanded in accordance with the provisions of section 73 or section 74, as the case may be.”
In simple words, now system will compare the availability of ITC as per GSTR-2 and utilisation of ITC in GSTR-3B. If excess credit is utilized then you need to explain the difference within 7 days or pay the difference.
Hence make sure the your supplier provide proper invoice to you and they have correctly specified your GSTIN on their invoice and they are timely filing their GST return. And the invoice of input are genuine and ask for E-invoice if turnover of your supplier exceeds the specified limit..otherwise ITC may be denied to you.
If you have received a notice under new rule 88D…then you need to reply within seven days.
First you need to find out the reason for difference in ITC available as per GSTR-2 data and ITC availed in GSTR-3B….
Now you need to .then you need to furnish a reply, electronically on the common portal, incorporating reasons in respect of the amount of excess input tax credit that has still remained to be paid.
If reason is duty to wrong GSTIN in the record of your supplier….you need to take up with your supplier to rectify their records so that ITC credit can be made available to you.