Suggestions on GST Implementation Issues 28.09.2017 by ICAI
50. Matching, reversal and reclaim of input tax credit
Section 42(1) of the CGST Act provides that the details of every inward supply furnished by
a registered taxable person (hereinafter referred to in this section as the ‘recipient’) for a tax
period shall, in the manner and within the time prescribed, be matched-
(a) with the corresponding details of outward supply furnished by the corresponding taxable
person (hereinafter referred to in this section as the ‘supplier’) in his valid return for the
same tax period or any preceding tax period,
(b) with the integrated goods and services tax paid under section 3 of the Customs Tariff
Act, 1975 in respect of goods imported by him; and
(c) for duplication of claims of input tax credit.
Issue
There is no provision to cover situations where recipient pays tax on reverse charge which is
not disclosed by the supplier. Where a recipient of Goods or Services pays the taxes on
reverse Charge basis he should not be denied ITC of the same merely on the grounds that it
is not disclosed by a Supplier.
Suggestion
• It is therefore suggested that a specific provision be added to cover this aspect for the
purpose of better compliance by supplier.
• Also exclude from the operation of this section in cases covered by section 18(4) – bona
fide exemption reversed.
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