Introduction
Differences of ITC in GSTR-3B vs GSTR-2A have become a common reason for GST demands and disputes. Recently, the Orissa High Court quashed a GST demand order solely based on mismatches, ruling that denying Input Tax Credit (ITC) without proper hearing violates the principle of natural justice.
Background: GSTR-3B vs GSTR-2A
- GSTR-3B: A monthly self-declared summary return.
- GSTR-2A: An auto-drafted statement reflecting suppliers’ invoices.
Mismatch arises when purchases reported by suppliers do not match what the buyer claims in GSTR-3B.
Key Facts of the Orissa HC Case
- Petitioner: Assessee faced ITC disallowance due to mismatch.
- Dispute: Tax authority raised a demand based solely on GSTR-2A differences.
- Finding: No show cause notice or hearing was given.
- Judgment: Orissa High Court quashed the order citing violation of natural justice.
📌 Reference: M/s Raaas Corporate Service Pvt. Ltd. v. State of Odisha, W.P.(C) No. 7450 of 2021
Why This Matters for Taxpayers
The Orissa HC clarified:
✅ Mismatch alone is not conclusive proof of wrongful ITC.
✅ Taxpayer must get an opportunity to explain.
✅ No demand without proper notice and hearing.
This reinforces Section 73 of the CGST Act, 2017: proceedings must follow due process.
How to Avoid ITC Mismatch Issues
To safeguard your claim:
- Reconcile purchase invoices monthly.
- Communicate with non-compliant suppliers.
- Maintain supporting documents.
- Respond promptly to any GST notices.
Expert Tip
Always download your GSTR-2B too — it’s a static statement and more reliable for ITC matching than GSTR-2A. Use it to cross-check before filing GSTR-3B.
Legal Takeaway: Differences of ITC in GSTR-3B vs GSTR-2A
Mismatch ≠ automatic ITC reversal! If you receive a notice:
- Check whether a valid SCN (Show Cause Notice) was issued.
- Verify if you were given a fair chance to respond.
- Take legal advice before paying up.
Official Guidance
- Refer to CBIC Circular No. 183/15/2022-GST clarifying ITC claims.
- Read the CGST Act Section 16 & 73 on ITC eligibility and recovery.
👉 External link: CBIC Official Website
FAQs
Q1: What happens if ITC claimed is higher than GSTR-2A?
You may receive a notice. If you have valid tax invoices and payment proofs, you can explain.
Q2: Is GSTR-2A legally binding?
No. It’s a facilitative tool — final ITC eligibility depends on actual purchases and valid invoices.
Snippet Summary (40–50 words)
The Orissa High Court quashed a GST demand order based only on ITC mismatch in GSTR-3B vs GSTR-2A, upholding taxpayers’ right to a fair hearing. Learn how to safeguard your Input Tax Credit and handle mismatch notices properly with Efiletax.
Need Help?
Efiletax helps you handle GST mismatches and notices confidently. Talk to our experts today and stay compliant hassle-free. Explore our GST Services.