Home GST Draft Reply of GST Notice DRC-01 for ITC mismatch in GSTR-2B and GSTR-3B

Draft Reply of GST Notice DRC-01 for ITC mismatch in GSTR-2B and GSTR-3B

Draft Reply of GST Notice DRC-01 for ITC mismatch in GSTR-2B and GSTR-3B

Draft Reply of GST Discover DRC-01 for ITC mismatch in GSTR-2B and GSTR-3B

When the involved tax officer points a discover in FORM GST DRC- 01 to the taxpayer for non-payment of tax or brief cost of tax or enter tax credit score utilised incorrectly or availed incorrectly or a refund is issued erroneously and the taxpayer doesn’t pay the identical, he’s known as a defaulter, and the involved tax officer can concern FORM GST DRC-09 for restoration of the quantity because of the defaulter from the division as per clause (a) of sub-section (1) of part 79 the CGST Act.

Here’s a Draft Reply of DRC-01

That the taxpayer needs to submit as beneath:-

1. That, the DRC-01 issued was not containing any digital signature of the right officer. Subsequently, the above discover will not be sustainable within the eyes of Legislation and such SCN to be thought of invalid.

That, within the matter of Marg ERP Ltd vs CGST arising out of W.P.C. 872/2023, the Hon’ble Delhi Excessive Court docket has held that “an unsigned discover/order can’t be thought of as an order and therefore can’t be sustained.”

That the DIN (Doc Identification Quantity) entered by your good self is wrong and was not verified and authenticated at GST Portal. Subsequently, within the absence of appropriate DIN, the above Present Trigger Discover(SCN) is null and void.

That within the above-mentioned discover, the date of the Private Listening to is just too early and the way it may be executed earlier than the submission of reply of the taxpayer which exhibits that the absence of software of thoughts by the right officer whereas issuing the SCN to the taxpayer.

That numerous discrepancies had been seen by your good-self are:-

Unpaid Tax Legal responsibility for Mismatch Between GSTR-1 and 3B

That being the primary yr of implementation of the brand new GST Legislation, the taxpayer and his workers was not properly educated and properly versed with the brand new system of GST. Subsequently, sure extra entries had been fed within the system wrongly as a result of clerical errors and therefore, a mismatch arises. Subsequently, you’re requested to please don’t contemplate the next entries in GSTR-1 :-

Date, Invoice No., GSTIN, Bill Worth

Extra ITC Claimed in Kind 3B as in comparison with GSTR 2A

That no extra ITC was availed by the taxpayer in his returns. The taxpayer had claimed ITC just for which he’s in possession of products, bill, proof of financial institution funds and precise motion of products was made and all transactions are completely real excluding ineligible ITC. Nonetheless, all of the sellers exist at their enterprise premises and may verify the transaction additionally. Subsequently, you’re requested to please contemplate the next transactions and permit the ITC to the taxpayer as all of the situations of Part 16 of the CGST/DGST Act, 2017 had been duly complied. The identical view was additionally held by the Hon’ble Supreme Court docket within the matter of Ecom Gill Espresso Buying and selling Pvt Ltd.

That, within the matter of Diya Companies vs State Tax Officer arising out of W.P.(C). 29769 of 2023, the Hon’ble Kerela Excessive Court docket held that “ITC can’t be denied to the recipient solely on the bottom that transactions should not mirrored in GSTR-2A.” Nonetheless, GSTR-2A is merely a facilitator and can’t be presumed to be correct and full.

The listing of such transactions as a result of which the mismatch arising is as follows and all the required paperwork are enclosed in your prepared reference:-

Date, Invoice No. GSTIN, Bill Worth, E-way Invoice No.

ITC Claimed from Non-Existent Sellers

That the purchases from the next sellers had been made which exist on the time of transaction and precise motion of products was taken place. Tax payer is in possession of a legitimate bill, e-way invoice and proof of cost of taxes together with cost of products from financial institution to the provider. All of the returns of the provider had been additionally filed as per your GST Portal and are within the information of the GST Portal. Subsequently, compliance of Part 16 of the CGST/ DGST Act, 2017 was utterly executed by the taxpayer.

Additional, it’s the responsibility of the provider to pay the taxes collected as per the mechanism drawn by the Central Authorities of India in any other case it is going to be tantamount to double taxation.

Nonetheless, it’s not doable to confirm from the taxpayer that whether or not the provider had paid the tax or not or whether or not the provider would have adjusted from his ITC as a result of it’s the responsibility of the administrator (i.e.Authorities) and never the bonafide purchaser and as per GST portal, the taxpayer can confirm solely that the provider had filed his GSTR-3B or not, which was duly filed on this case. Additionally it is pertinent to notice that your good self has not introduced any materials opposite to Legislation and subsequently, no opposed inference could also be referred to as for.

Date, Invoice No., GSTIN, Bill Worth, E-way Invoice

Copy of the above-said invoices, e-way invoice together with the cost of proof is enclosed in your prepared reference.

That within the matter of Gargo Merchants vs Joint Commissioner of Industrial Taxes arising out of W.P.C. 1009 of 2022, the Hon’ble Calcutta Excessive Court docket held that “a recipient of products/companies can’t be denied ITC if provider turns into non-existent or their registration was cancelled retrospectively.”

The identical view was additionally upheld by the Hon’ble Excessive Court docket of Calcutta within the matter of LGW Industries Ltd vs Union of India. W.P.C 23512 of 2019.

That the Bombay Excessive Court docket in CIT Vs. T. Maneklal Mfg. Co. Ltd. (1978) 115 ITR 725 has noticed that the Revenue-tax Act being an all-India statute, uniformity within the development of its statutory provisions is eminently fascinating and the thought of opinion of another Excessive Court docket needs to be adopted except there are overriding causes for taking a divergent view. Subsequently, GST can also be an All India Statute and Precept of uniformity needs to be adopted.

Subsequently, trying into the information and circumstances of the case, the taxpayer is able to absolutely co-operate with you and request you to quash the discover and delete the proposed demand in full.

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Drafted by CA Naman Gupta. He may be contacted at 9891468846; or [email protected].


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