Credit-note tax reporting errors do not create wrongful input tax credit where no revenue loss or duplicate reduction occurs.
Case-Laws
GST
GST treatment of tax on credit notes for returned goods requires distinguishing a GSTR-3B\/GSTR-2A mismatch from wrongful input tax credit. Credit-note tax relating to the supplier's own outward supply is not input tax and should reduce output tax liability; where credit notes are timely declared, original output tax was paid, and no duplicate reduction or revenue loss arises, incorrect return-table reporting is procedural. A demand must remain within the grounds stated in the show cause notice. For 2017-18, recipient reversal of credit was not a condition for the supplier's output-tax reduction; recipient non-reversal is separately assessable. Interest and penalty depend on tax being due.
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