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    Section 43 of GST - Matching, Reversal and Reclaim of Reduction

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    Navya
    Section 43 of the GST Act deals with matching credit notes issued by suppliers that reduce output tax liability with reductions of input tax credit claimed by recipients. It outlines procedures for discrepancies between these, including communicating issues to both parties and potentially adding amounts back to the supplier's output tax liability. The section aims to prevent double reductions of tax - once via the supplier's reduced liability and again through the recipient's unadjusted claims of input tax credit. Detailed rules around interest liability and refunds are also provided.

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    Section 43 of GST - Matching, Reversal and Reclaim of Reduction

    Uploaded by

    Navya
    30 views5 pages
    Section 43 of the GST Act deals with matching credit notes issued by suppliers that reduce output tax liability with reductions of input tax credit claimed by recipients. It outlines procedures for discrepancies between these, including communicating issues to both parties and potentially adding amounts back to the supplier's output tax liability. The section aims to prevent double reductions of tax - once via the supplier's reduced liability and again through the recipient's unadjusted claims of input tax credit. Detailed rules around interest liability and refunds are also provided.

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    Section 43 of GST - Matching, reversal and reclaim of reduction

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    Section 43 of the GST Act deals with matching credit notes issued by suppliers that reduce output tax liability with reductions of input tax credit claimed by recipients. It outlines procedures for discrepancies between these, including communicating issues to both parties and potentially adding amounts back to the supplier's output tax liability. The section aims to prevent double reductions of tax - once via the supplier's reduced liability and again through the recipient's unadjusted claims of input tax credit. Detailed rules around interest liability and refunds are also provided.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    30 views5 pages

    Section 43 of GST - Matching, Reversal and Reclaim of Reduction

    Uploaded by

    Navya
    Section 43 of the GST Act deals with matching credit notes issued by suppliers that reduce output tax liability with reductions of input tax credit claimed by recipients. It outlines procedures for discrepancies between these, including communicating issues to both parties and potentially adding amounts back to the supplier's output tax liability. The section aims to prevent double reductions of tax - once via the supplier's reduced liability and again through the recipient's unadjusted claims of input tax credit. Detailed rules around interest liability and refunds are also provided.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
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    HOME » GST » GST SECTIONS » Section 43 of GST – Matching, reversal and reclaim of
    reduction in output tax liability

    Section 43 of GST – Matching, reversal


    and reclaim of reduction in output tax
    liability
    June 26, 2021

    by GST

    Table of Contents
    1.
    Section 43 of GST
    2.
    Introduction
    3.
    Analysis
    4.
    Additional Comments:

    Section 43 of GST – Matching, reversal and reclaim of


    reduction in output tax liability. All Details for GST Section
    43, In this section you may find all details for Matching,
    reversal and reclaim of reduction in output tax liability.
    Detailed Analysis of GST Section 43 of GST Act 2017 –
    Matching, reversal and reclaim of reduction in output tax
    liability.

    Must Read – List of all sections of GST

    Section 43 of GST
    (1) The details of every credit note relating to outward
    supply furnished by a registered person (hereinafter referred
    to in this section as the ‘supplier’) for a tax period shall, in
    such manner and within such time as may be prescribed, be
    matched –

    (a) with the corresponding reduction in the claim for input


    tax credit by the corresponding registered person
    (hereinafter referred to in this section as the ‘recipient’) in
    his valid return for the same tax period or any subsequent
    tax period, and
    (b) for duplication of claims for reduction in output tax
    liability
    (2) The claim for reduction in output tax liability by the
    supplier that matches with the corresponding reduction in
    the claim for input tax credit by the recipient shall be finally
    accepted and communicated, in the manner as may be
    prescribed, to the supplier

    (3) Where the reduction of output tax liability in respect of


    outward supplies exceeds the corresponding reduction in
    the claim for input tax credit or the corresponding credit
    note is not declared by the recipient in his valid returns, the
    discrepancy shall be communicated to both such persons in
    the manner as may be prescribed.

    (4) The duplication of claims for reduction in output tax


    liability shall be communicated to the supplier in such
    manner as may be prescribed.

    (5) The amount in respect of which any discrepancy is


    communicated under sub-section (3) and which is not
    rectified by the recipient in his valid return for the month in
    which discrepancy is communicated shall be added to the
    output tax liability of the supplier, in such manner as may be
    prescribed, in his return for the month succeeding the month
    in which the discrepancy is communicated.

    (6) The amount in respect of any reduction in output tax


    liability that is found to be on account of duplication of
    claims shall be added to the output tax liability of the
    supplier in his return for the month in which such duplication
    is communicated.
    (7) The supplier shall be eligible to reduce, from his output
    tax liability, the amount added under sub-section (5) if the
    recipient declares the details of the credit note in his valid
    return within the time specified in sub-section (9) of section
    39.

    (8) A supplier in whose output tax liability any amount has


    been added under subsection (5) or sub-section (6), shall be
    liable to pay interest at the rate specified under subsection
    (1) of section 50 in respect of the amount so added from the
    date of such claim for reduction in the output tax liability till
    the corresponding additions are made under the said sub-
    sections.

    (9) Where any reduction in output tax liability is accepted


    under sub-section (7), the interest paid under sub-section (8)
    shall be refunded to the supplier by crediting the amount in
    the corresponding head of his electronic cash ledger in such
    manner as may be prescribed.

    Provided that the amount of interest to be credited in any


    case shall not exceed the amount of interest paid by the
    recipient.

    (10) The amount reduced from output tax liability in


    contravention of the provisions of subsection (7) shall be
    added to the output tax liability of the supplier in his return
    for the month in which such contravention takes place and
    such supplier shall be liable to pay interest on the amount so
    added at the rate specified in sub-section (3) of section 50.

    Introduction
    This provision relates to matching, reversal and reclaim of
    output tax liability due to discrepancy in the output tax
    reduced by the supplier by way of issuing credit note and
    corresponding reduction of input tax credit by the recipient.
    However, the provisions of section 43 shall not be applicable
    for the financial year 2017-18/18-19 as filing of details in
    inward supplies in Form GSTR 2 and furnishing a monthly
    return in Form GSTR 3 has been suspended for an indefinite
    period.

    However, still matching of reduction in output tax paid by the


    supplier and reduction of corresponding input tax credit (If
    availed earlier) will be verified by revenue authorities by
    adopting different modes, such as, obtaining details through
    jurisdiction of the recipient of supply, as the Government will
    not be ready to forego revenue twice viz., (i) on account of
    reduction in output tax liability by the supplier by way of
    issuing credit note; and (ii) taking of input tax credit in full,
    without reversing credit resulting due to credit note issued
    by the supplier.

    The said reduction in output tax liability can also be possible


    on account of reduction of output tax liability by the supplier
    which originally was due to duplication of output tax liability,
    the procedure as said above would mutatis and mutandis
    would apply

    Analysis
    A. Issuance of Credit note for reduction in output tax
    liability:

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