ITC mismatch notice: GSTR-2B vs GSTR-3B

Why this mismatch happens

Since 1 October 2022, credit can be taken only on invoices that appear in your GSTR-2B (Section 16(2)(aa)). GSTR-2B is built from what your suppliers report in their GSTR-1 or IFF. If they report late or wrongly, your credit does not show, even though you hold a valid invoice.

The usual causes

• The supplier has not filed GSTR-1, or filed it late, so the invoice is missing from your GSTR-2B for that month.
• The supplier reported the invoice in a different month from the one you claimed it in.
• Credit notes or amendments that reduced credit in GSTR-2B but were not reduced in your GSTR-3B.
• Wrong GSTIN or wrong invoice details entered by the supplier.
• Credit taken on items the law blocks (Section 17(5)).
• Reclaiming credit you earlier reversed, or taking credit in a month different from the one shown in GSTR-2B.
• Items that are not part of GSTR-2B at all, such as some reverse charge purchases, claimed in the wrong table.

Which notice you are looking at

• DRC-01C: an automatic intimation from the portal when the credit you took is higher than GSTR-2B by more than the set margin. You answer in Part B of the same form within a short window, or pay the difference with interest through DRC-03.
• ASMT-10: a scrutiny notice asking you to explain the difference. Reply in ASMT-11.
• DRC-01: a show cause notice proposing a demand. Reply in DRC-06.

Step by step: reconcile and reply

1. Download your GSTR-2B for each month in the notice period, in the Excel or JSON format.
2. Match every line of your purchase register against it by supplier GSTIN, invoice number, date and tax amount.
3. Sort the result into four groups: matched, in your books but missing from GSTR-2B, in GSTR-2B but missing from your books, and value differences.
4. For each missing invoice, find the reason: supplier not filed, filed in another month, or an error on your side.
5. Check whether the invoice later appeared in a subsequent month's GSTR-2B. Credit that shows up later can be supported with that evidence.
6. Where the credit was wrongly taken, reverse it in your next GSTR-3B with interest, or pay it through DRC-03 as the notice directs.
7. Prepare a supplier-wise reply: the invoice, proof of payment, the supplier's ledger or confirmation, and the month it appeared in GSTR-2B.
8. File the reply in the form the notice asks for, before the date, and keep the acknowledgement.

Chase the supplier, not just the notice

Most mismatches come from suppliers who have not filed. Send each one a clear reminder with the invoice numbers and amounts, and ask for the filing date. A WhatsApp message to the supplier works faster than email. Keep a record of every reminder, because it supports your case.

You can also protect yourself before filing: compare GSTR-2B with your books each month, and claim only what is in GSTR-2B.

Common mistakes

• Replying with a total difference instead of supplier-wise details.
• Reversing the credit without checking whether it was in fact eligible.
• Forgetting that wrongly taken credit that has been used carries interest, so waiting costs more.
• Claiming credit before it appears in GSTR-2B.
• Not keeping evidence of reminders sent to suppliers.