Mismatches between GSTR 2A vs 3B- Things to be considered before you respond to GST Notices

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Among the discrepancies for which notices are issued by department, mismatches between GSTR 2A vs 3B tops it all. Objective of this blog is to highlight aspects that are relevant while responding to the GST Notices especially for FY 2017-18 & 2018-19. Deadline to issue the order under sec 73(10) for FY 2018-19 is 30th April 2024, thus department is rushing orders in their favor, if you fail to highlight appropriate aspects in your reply to notices issued under sec 73/74.


  • Introduction and relevance of GSTR 2A:  
    • The FORM GSTR 2A was not established with a defined purpose for financial years 2017-18 and 2018-19. Provision in respect of limit of ITC on basis of GSTR-2A was introduced only on 9-10-2019, but system was not fully established for some time.
    •  Hence, for the financial years 2017-18 and 2018-19, insistence of matching of GSTR-2A and Input Tax Credit availed by recipient was not legitimized. 
  • Provisions applicable from 9-10-2019 till 1-1-2022:  
    • The ITC availed by recipient on basis of tax invoices or debit notes (which have been received by recipient) not furnished by supplier under section 37(1) [i.e. in his GSTR-1] shall not exceed 5% of eligible credit available in respect of invoices and debit notes which have been furnished by supplier in his GSTR-1 return under section 37(1) of CGST Rules -
    • Rule 36(4) of CGST Rules, inserted w.e.f. 9-10-2019  had tolerance threshold of 20% during 9-10-2019 to 1-1-2020 and 10% during 1-1-2000 to 31-12-2020. It was 5% w.e.f. 1-1-2021 until 31-12-2021. 
    • The said mismatches between GSTR 2A and 3B was entertained even for FYs 2019-20, 2020-21 & 2021-22 within these threshold limits set by rule 36(4). 
    • However, the corresponding provision sec 16(2)(aa) to this rule 36(4) as inserted only in 1st Jan 2022. 
    • Thus, for FY 2017-18 & 2018-19 , sec 16(2)(aa) itself stands not relevant, and this was the background with which Circular No. 183/15/2022-GST dated 27-12-2022 was introduced to fill the gap.
    • Rule 60(1) was inserted effective from 1-1-2021 to give a context to GSTR 2A as Form and manner of ascertaining details of inward supplies, and only from 1-1-2022, GSRT 2B was introduced to align with underlying provision sec 16(2)(aa)
    • Circular No. 183/15/2022-GST dated 27-12-2022: 
      • This circular facilitates only bona-fide errors of suppliers because of which invoices aren't reflected in GSTR 2A. 
      • The question remain unaddressed in this circular was mala-fide errors committed by the suppliers, and role of department in this context though. 
      • Circular No. 193/05/2023-GST dated 17-7-2023 has clarified that the procedure as prescribed in CBIC Circular No. 183/15/2022-GST dated 27-12-2022 shall be followed during 1-4-2019 to 31-12-2021, subject to restrictions as applicable during the respective period.
    • Burden of proof under sec 155: 
      • Where any person claims that he is eligible for input tax credit under this Act, the burden of proving such claim shall lie on such person - section 155 of CGST Act. 
      • The operational definition of "the burden of proof" is used for department's convenience very often as they expect recipient to ensure their supplier remits the taxes collected to government.  
      • The genuineness of purchases should only be proved with  invoices issued by suppliers, Evidence of having received the goods or services and payment to suppliers not beyond the immediate this remit. 
      • The same was reiterated, In M/s Galaxy Traders case by the Hon’ble Kerala High Court,  in the case of LGW Industries Limited by the Hon’ble Calcutta High Court&  in the case of Suncraft Energy (P) Ltd. Vs. Assistant Commissioner, State Tax by the Hon’ble High Court of Calcutta.
    • Role of department:
      • Sec 41 used to allow provisional ITC amended effective 1-1-2022 in line with sec 16(2)(aa)
      • Matching, reversal and reclaim of input tax credit: Sec 42,43 & 43A never came in to operations and omitted effective 1-1-2022
      • Recovery efforts under sec 73 and 74 for mala-fide errors not covered by Circular No. 183/15/2022-GST dated 27-12-2022 are largely missing from department. The recipients became a easy target.
      • Neither recovery efforts are undertaken nor its reached finality, the recipient becomes a easy target.
    Encourage taxpayers to take note of some of the aspects relevant in your case to include in your reply. 

    - LDR

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