Matching, Reversal and Reclaim of ITC


Date: 17 Aug 2022

Matching, Reversal and Reclaim of ITC


If your ITC claims are not in place, it is simple to assume that you are not fully GST-compliant. Businesses would benefit from having access to a report detailing the percentage of their mismatched credit, as they will need to work with suppliers to minimise any gaps. Busy accounting software makes all accounting tasks simple and stress-free.


What does a credit mismatch mean in terms of sending out scrutiny notices?


Many taxpayers are concerned about the problems related to the lack of credit availability. Mismatched credit mainly refers to the following:

  • Differences in the credit amount between GSTR-3B, GSTR 2-B, and GSTR 2A

  • Discrepancies between GSTR-3B and GSTR-1 


If there are any discrepancies between these returns, the taxpayers will receive scrutiny notices.


Modes Of Communicating Differences Noticed In Returns By Officers 

Any discrepancy discovered by the authorised official must be reported to the relevant party using Form GST ASMT-10. What's in the form:

  • Observations of the officer

  • The taxpayer needs more time to respond to this notice with an explanation.


Actions Available To Taxpayers Who Receive Notice  


Duplication Of The ITC Claim By Recipient: 

The beneficiary will be informed if a claim has already been submitted and is duplicated. The earlier ITC will be added to the recipient's output tax due for the month the duplication was communicated if a correction is not made.



If there are additions, the recipient will be obligated to pay an interest charge of 18% from the day the ITC was claimed until the additions were made in returns on the amount added to the output tax due.


Re-Claim Of ITC

  • It refers to reclaiming the amount of ITC that was previously reversed due to an inconsistency in the amount that the supplier reported in his valid return or a duplicate ITC claim. Only if the supplier includes the invoice and/or debit note information in his legally-required return for the period in which the supplier discovered the omission or inaccurate information or in which the communication about the same was received is the supplier eligible to make such reclaims.

  • The recipient's Electronic Credit Ledger will be credited with any interest previously paid on an excess ITC claim.

  • Reimbursement will only be given if an ITC claim is duplicated because doing so is against GST regulations.