Date: – …../…../2024

To,

STATE TAX OFFICER

…………………………

………………………………

Subject: Reply to Show Cause Notice having DIN GST/24XXXXXXXXXXX/18/1 dated …/…/2024

GSTIN: –  24XXXXXXXXXXX

Sir/Madam,

The following reply is furnished in response to the Show cause Notice issued by the State Tax Officer in respect of Under declaration of output tax and excess claim of ITC under section 16(2)(c) of SGST ACT 2017 dated dated …/…/2024 for the financial year 2017-18 vide DIN GST/24XXXXXXXXXXX/XX/0

1. On the basis of reconciliation of turnover in GSTR-9 the Ld. officer contended that the taxpayer has not correctly Declared tax on his outward supplies.

• Reply: Register person filed Form GSTR-3B Regularly and paid tax accordingly. The notice was issued to demanding Rs ……../- on basis of reconciliation turnover in form GSTR -09. However, the taxpayer already paid such amount through DRC-03, dated …/../2024

1. The excess input tax credit (ITC) claimed on CGST amounting of Rs………../- and SGST amounting of Rs. …………/-

• Reply: However, taxpayer claimed correct ITC Based on conditions laid down in Section 16 of the CGST Act, 2017. The assesse was in possession of a valid tax invoice, had received the goods and services, had paid tax to the supplier (who acts as an agent of the government) and had filed all the returns. Further, the credit was also not blocked in accordance with Section 17 of the CGST act, 2017. Hence, when all the conditions for claiming the credit was satisfied the claim of the taxpayer could not be denied.
• Further, CBIC vide Press Release dt. 04.05.2018, “(iv) No automatic reversal of credit: There shall not be any automatic reversal of input tax credit from buyer on non-payment of tax by the seller. In case of default in payment of tax by the seller, recovery shall be made from the seller however reversal of credit from buyer shall also be an option available with the revenue authorities to address exceptional situations like missing dealer, closure of business by supplier or supplier not having adequate assets etc.”
• Moreover, Press release dated 18.10.2018was issued wherein it was stated that, “It has also clarified that, apprehensions in the mind of many taxpayers that ITC can be availed only on the basis of matching with GSTR-2A credit is not correct as GSTR-2A is made available to recipient only as a taxpayer facilitation. Taxpayers can avail ITC on self-assessment basis in pursuance of provisions contained under section 16 and rules made thereunder.”
• The officer issued Show cause notice on the based of amount auto-populated in form GSTR- 2A. which is wrong and void ab initio. According to the taxpayer, eligible ITC on inward supply of good and service in the month of ……….. – 20…. was Rs…………/- which was correctly claim in periodic return of form GSTR-3B during the year under consideration. However, such supply is not block credit under 17(5) of the act and taxpayer have valid invoice of ITC claim and tax paid to the supplier during the year under consideration. The copy of such invoice is enclosed herewith.

Details regarding such invoice are as under:-

III. The excess input tax credit (ITC) claimed on CGST/SGST amounting of    ………………/-

• Reply: The said excess amount shown in notice was claimed in Form No. 3B till Month of …. 20…. However, said has been shown in GSTR 2A in the extended period of ITC after ….. 20…. All that were supported by Invoice, and payment of the same was made before the time limit prescribed under the Act.