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CA Intermediate · Taxation · Returns

Mehta Electronics, Indore, a regular taxpayer, claimed input tax credit in GSTR-3B. Its supplier, Raj Components, did not report the invoice in its GSTR-1, so the invoice does not appear in Mehta's GSTR-2B for the month. Which statement correctly reflects the position under the CGST Act regarding Mehta's credit for that month?

Mehta cannot claim the credit for that month. Under section 16(2)(aa), input tax credit is available only when the supplier has furnished the invoice details in GSTR-1 and they are communicated to the recipient in GSTR-2B. Until it appears there, the credit is not allowed.

  1. AMehta can claim the credit fully, as the tax invoice and receipt of goods are sufficient
  2. BMehta can claim credit only if the supplier's tax has been furnished in its statement of outward supplies and is reflected in the auto-generated statement, as section 16(2)(aa) requiresCorrect
  3. CMehta can claim 50% of the credit provisionally and the rest later
  4. DMehta can claim the credit only after the supplier files its annual return

Explanation

Section 16(2)(aa) allows credit only if the details of the invoice have been furnished by the supplier in GSTR-1 and are communicated to the recipient through GSTR-2B. Since the invoice is not in GSTR-2B, credit cannot be claimed for that month. The 50% provisional credit was a past arrangement and is not available now.

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