THE CENTRAL GOODS AND SERVICES TAX ACT, 2017
RETURNS
Section 43: Matching, reversal and reclaim of reduction in output tax liability. (Relevant Rules 73 to 79)
(1) The details of every credit note relating to outward supply
furnished by a registered person (hereafter in this section referred to as the
“supplier”) for a tax period shall, in such manner and within such time
as may
be prescribed, be matched––
a)
with
the corresponding reduction in the claim for input tax credit by the
corresponding registered person (hereafter in this section referred to as the
“recipient”) in his valid return for the same tax period or any subsequent tax
period; and
b)
for duplication of claims for reduction in
output tax liability.
(2) The
claim for reduction in output tax liability by the supplier that matches with
the corresponding reduction in the claim for input tax credit by the recipient
shall be finally accepted and communicated, in such manner
as may be
prescribed, to the supplier.
(3) Where the reduction of output tax liability in respect of outward supplies
exceeds the corresponding reduction in the claim for input tax credit or the
corresponding credit note is not declared by the recipient in his valid
returns, the discrepancy shall be communicated to both such persons in such
manner as may be prescribed.
(4) The duplication of claims for reduction in output tax liability shall be
communicated to the supplier in such manner as may be prescribed.
(5) The amount in respect of which any discrepancy is communicated under
subsection (3) and which is not rectified by the recipient in his valid return
for the month in which discrepancy is communicated shall be added to the output
tax liability of the supplier, in such manner as may be prescribed, in his
return for the month succeeding the month in which the discrepancy is
communicated.
(6) The amount in respect of any reduction in output tax liability that is
found to be on account of duplication of claims shall be added to the output
tax liability of the supplier in his return for the month in which such
duplication is communicated.
(7) The supplier shall be eligible to reduce, from his output tax liability,
the amount added under sub-section (5) if the recipient declares the details of
the credit note in his valid return within the time specified in sub-section
(9) of section 39.
(8) A supplier in whose output tax liability any amount has been added under
subsection (5) or sub-section (6), shall be liable to pay interest at the rate
specified under subsection (1) of section 50 in respect of the amount so added
from the date of such claim for reduction in the output tax liability till the
corresponding additions are made under the said sub-sections.
(9) Where any reduction in output tax liability is accepted under sub-section
(7), the interest paid under sub-section (8) shall be refunded to the supplier
by crediting the amount in the corresponding head of his electronic cash ledger
in such manner as may be prescribed:
#Provided that the amount of interest to be credited in any case shall not
exceed the amount of interest paid by the recipient.
(10) The amount reduced from output tax liability in contravention of the
provisions of sub-section (7) shall be added to the output tax liability of the
supplier in his return for the month in which such contravention takes place
and such supplier shall be liable to pay interest on the amount so added at the
rate specified in sub-section (3) of section
50.
#Applicable from a date to be notified later