The Goods and Service Tax Appellate Tribunal (GSTAT) has upheld a ₹1.42 lakh demand against a Raipur business after finding that it failed to establish its explanation for input tax credit missing from GSTR-2A. 

The Bench of  Pradeep Kumar Vyas (Judicial Member) and Chandra Bhushan Singh (Technical Member) has observed that input tax credit (ITC) for FY 2018–19 cannot be denied merely because an invoice does not appear in GSTR-2A. The business had not adequately proved its claim that its supplier mistakenly reported three sales as B2C instead of B2B.

Buy Now: E-Magazine: 1000+ Landmark GST Judgments (2017–2026)

The Bench upheld IGST of ₹70,774, interest of ₹61,742 and a penalty of ₹10,000—a total of ₹1,42,516. Its order was dated September 28, 2026. 

Departmental scrutiny found that the IGST credit claimed by Anant Decor in GSTR-3B for FY 2018–19 exceeded the amount reflected in GSTR-2A by ₹70,774. The department issued a scrutiny notice in October 2023 and a show-cause notice in December 2023, but the business replied to neither. The adjudicating authority confirmed the demand in April 2024.

In its first appeal, Anant Decor relied on three June 2018 invoices issued by Glo Panels Pvt. Ltd., a supplier ledger and a certificate from the supplier dated April 15, 2024. The certificate stated that the supplies had been made to Anant Decor and that the tax had been paid through the supplier’s GSTR-3B. It attributed the missing GSTR-2A entries to a mistake in GSTR-1: the supplier had allegedly shown the transactions as sales to an unregistered customer, or B2C, instead of sales to a registered customer, or B2B.

The three invoices carried IGST of ₹66,193.66. Anant Decor argued that CBIC Circular No. 183/15/2022-GST specifically provides a way to verify ITC claims affected by such reporting errors in FY 2017–18 and FY 2018–19.

The Tribunal accepted Anant Decor’s central legal point: for FY 2018–19, the absence of an invoice from GSTR-2A was not, by itself, enough to disallow ITC. The later requirement in Section 16(2)(aa) could not be applied retrospectively to the June 2018 transactions.

That did not automatically establish entitlement to the credit. The Bench said the claimant still had to prove the applicable conditions under Section 16, while Section 155 placed the burden of proving ITC eligibility on the person claiming it. A GSTR-2A difference could start an inquiry, but the decision had to rest on the evidence supporting the underlying transactions and the claimed credit.

The Tribunal also recognised that Circular No. 183 covers a situation in which a supplier issues an invoice bearing the registered buyer’s GSTIN but mistakenly reports the supply as B2C. For a supplier-wise difference of up to ₹5 lakh, the circular contemplates a supplier certificate concerning the supply and payment of tax. The Bench expressly said that the supplier’s GSTR-1 extract or electronic ledgers were not mandatory additional documents in that category.

The Tribunal treated the certificate as relevant evidence, but declined to regard it as conclusive proof of the asserted mistake. It noted that the certificate was issued almost six years after the transactions and only after scrutiny and show-cause proceedings had begun.

Anant Decor had not presented its explanation or documents to the adjudicating authority. Although substantial supporting material was included in its first appellate record, neither the business nor its representative attended the two hearings fixed by the First Appellate Authority. The Tribunal also recorded an admission that Anant Decor had no contemporaneous material explaining when or how the alleged B2C reporting error was detected.

One invoice was particularly significant. Its total value was ₹4,18,449, above the ₹2.5 lakh threshold then applicable to invoice-wise reporting of inter-State B2C supplies. According to the Tribunal, if the supplier had mistakenly treated that transaction as B2C, the relevant GSTR-1 entry offered an objective way to check the explanation. The Bench clarified that producing this entry was not an independent condition imposed by Circular No. 183; its absence mattered to the weight of the evidence in this case.

An e-way bill identified Glo Panels as supplier and Anant Decor, with its GSTIN, as recipient of the principal invoice. The Tribunal said this supported the recipient’s identity and the declared movement of goods, but did not establish how the supplier classified the sale in GSTR-1 or whether the corresponding tax was discharged through GSTR-3B. It also noted that the use of transport documents uploaded later in the proceedings was subject to the rules governing additional evidence.

On the record as a whole, the Bench found that Anant Decor had not sufficiently established the supplier-side reporting and tax-payment explanation on which its claim depended.

The Tribunal identified a separate gap in the figures. The three invoices on which Anant Decor relied contained IGST of ₹66,193.66, whereas the disputed credit was ₹70,774. No identified invoice or transaction-wise explanation supported the remaining ₹4,580.34.

It also rejected the argument that lower credit claimed under the CGST and SGST heads could offset the disputed IGST. The Bench said that a shortfall under one tax head could not simply be netted against excess credit under another without a legally valid, transaction-level reconciliation.

The Tribunal declined to send the case back for further supplier-side verification. It noted the unanswered notices, the missed first-appeal hearings and the further opportunity given during the Tribunal proceedings to clarify which documents had formed part of the earlier record.

It upheld interest of ₹61,742, observing that utilisation of the disputed credit was not contested and that Anant Decor had not provided a specific objection or alternative calculation. The ₹10,000 penalty was sustained as the applicable minimum under Section 73(9), since 10% of the confirmed tax was less than ₹10,000.

Membership Required to Access Case Details & Order Copy

To view the complete Case Details and Download Order Copy, you must have an active membership. Please subscribe to continue.

Read More: GST Demand Based on Witness Statements Without Cross-Examination Quashed: Madras HC