GST India Forum – Goods and Services Tax | Place for Experts Forums Bare Law Section 37- Matching, reversal and reclaim of input tax credit

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  • Madrecha and CoMadrecha and Co
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    #120 |

    (1) 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 additional duty of customs paid under section 3 of the Customs Tariff Act, 1975 (51 of 1975) in respect of goods imported by him, and
    (c) for duplication of claims of input tax credit.

    (2) The claim of input tax credit in respect of invoices and/or debit notes relating to inward supply that match with the details of corresponding outward supply or with the additional duty of customs paid shall, subject to the provisions of section 16 or 17, as the case may be, be finally accepted and such acceptance shall be communicated, in the manner as may be prescribed, to the recipient.

    (3) Where the input tax credit claimed by a recipient in respect of an inward supply is in excess of the tax declared by the supplier for the same supply or the outward supply is not declared by the supplier in his valid returns, the discrepancy shall be communicated to both such persons in the manner as may be prescribed.

    (4) The duplication of claims of input tax credit shall be communicated to the recipient in the 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 supplier in his valid return for the month in which discrepancy is communicated shall be added to the output tax liability of the recipient, in the manner as may be prescribed, in his return for the month succeeding the month in which the discrepancy is communicated.

    (6) The amount claimed as input tax credit that is found to be in excess on account of duplication of claims shall be added to the output tax liability of the recipient in his return for the month in which the duplication is communicated.

    (7) The recipient shall be eligible to reduce, from his output tax liability, the amount added under sub-section (5) if the supplier declares the details of the invoice and/or debit note in his valid return within the time specified in sub-section (9) of section 34.

    (8) A recipient in whose output tax liability any amount has been added under sub­section (5) or, as the case may be, under sub-section (6), shall be liable to pay interest at the rate specified under sub-section (1) of section 45 on the amount so added from the date of availing of credit 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 recipient by crediting the amount in the corresponding head of his electronic cash ledger in the 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 supplier.

    (10) The amount reduced from the output tax liability in contravention of the provisions of sub-section (7) shall be added to the output tax liability of the recipient in his return for the month in which such contravention takes place and such recipient shall be liable to pay interest on the amount so added at the rate specified in sub-section (3) of section 45.

    Adarsh MadrechaAdarsh Madrecha
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    Section 3 in The Customs Tariff Act, 1975

    3. Levy of additional duty equal to excise duty.

    (1) Any article which is imported into India shall, in addition, be liable to a duty (hereafter in this section referred to as the additional duty) equal to the excise duty for the time being leviable on a like article if produced or manufactured in India and if such excise duty on a like article is leviable at any percentage of its value, the additional duty to which the imported article shall be so liable shall be calculated at that percentage, of the value of the imported article. Explanation.- In this section, the expression” the excise duty for the time being leviable on a like article if produced or manufactured in India” means the excise duty for the time being in force which would be leviable on a like article if produced or manufactured in India or, if a like article is not so produced or manufactured, which would be leviable on the class or description of articles to which the imported article belongs, and where such duty is leviable at different rates, the highest duty.

    (2) For the purpose of calculating- under this section the additional duty on any imported article, where such duty is leviable at any percentage of its value, the value of the imported article shall, notwithstanding anything contained in section 14 of the Customs Act, 1962 , (52 of 1962 ) be the aggregate of-
    (i) the value of the imported article determined under sub- section (1) of the said section 14 or the tariff value of such article fixed under sub- section (2) of that section, as the case may be; and
    (ii) any duty of customs chargeable on that article under section 12 of the Customs Act, 1962 , (52 of 1962 ) and any sum chargeable on that article under any law for the time being in force as an addition to, and in the same manner as, a duty of customs, but not including the duty referred to in sub- section (1).

    (3) If the Central Government is satisfied that it is necessary in the public interest to levy on any imported article[ whether on such article duty is leviable under sub- section (1) or not] such additional duty as would counter- balance the excise duty leviable on any raw materials, components and ingredients of the same nature as, or similar to those, used in the production or manufacture of such article, it may, by notification in the Official Gazette, direct that such imported article shall, in addition, be liable to an additional duty representing such portion of the excise duty leviable on such raw materials, components and ingredients as, in either case, may be determined by rules made by the Central Government in this behalf.

    (4) In making any rules for the purposes of sub- section (3), the Central Government shall have regard to the average quantum of the excise duty payable on the raw materials, components or ingredients used in the production or manufacture of such like article.

    (5) The duty chargeable under this section shall be in addition to any other duty imposed under this Act or under any other law for the time being in force.

    (6) The provisions of the Customs Act, 1962 , (52 of 1962 ) and the rules and regulations thereunder, including those relating to drawbacks, refunds and exemption duties, shall,’ so far as’ may’ be, apply to the duty chargeable under this section as they apply in relation to the duties leviable under that Act.

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