Appellate Tribunal Mandates Invoice Verification Before Confirming Input Tax Credit Demands from GSTR-2A Discrepancies

The Goods and Services Tax Appellate Tribunal (GSTAT) held that tax authorities cannot confirm input tax credit (ITC) disallowances based strictly on automated mismatches between Form GSTR-3B and Form GSTR-2A. Officials are required to inspect physical or digital invoices and verify whether the recipient satisfies all statutory conditions stipulated under Section 16 of the Central Goods and Services Tax (CGST) Act.

Automated portal discrepancies often arise due to supplier filing delays rather than fraudulent credit claims by the recipient. Requiring authorities to conduct substantive invoice verification ensures that compliant purchasers are not penalized for supplier defaults, upholding the foundational mechanics of the tax credit chain. Tax professionals and accountants should maintain comprehensive invoice matching records and vendor communication trails to defend ITC claims during audits.

Challenge mechanical disallowances by presenting direct proof of tax payment and receipt of goods or services. Bottom line: Automated return mismatches alone are insufficient legal grounds for denying input tax credit without prior invoice scrutiny.