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If you receive a GST notice proposing reversal of input tax credit (ITC), first identify the exact invoices, tax periods, legal grounds, amount and reply deadline in the complete notice. Then reconcile each disputed invoice against your books, GSTR-2B, GSTR-3B, payment and receipt records, and any reversal or reclaim. A generic document bundle or a GSTR-2B entry alone cannot settle every ITC dispute.
Start with the allegation in the complete notice
Read the full notice and annexures, not just the portal summary. Make a separate entry for each disputed invoice or other credit item. Record the tax period, supplier and document references, provision cited, proposed tax, interest or penalty, reply route, date of service and stated response date. Check that the detailed notice and portal summary agree; if they do not, identify the difference in your response.
The ground matters because the evidence differs by allegation. For example, the CBIC’s Input Tax Credit Rules describe reversal where a recipient has taken credit but does not pay the supplier the value plus tax within the period specified in the Act. The rules also provide attribution or reversal methods for certain capital goods and for mixed business/non-business or taxable/exempt use. These are examples, not a diagnosis of your case: use the provision and facts stated in your notice, and check the law applicable to the relevant period.
Reconcile each credit across returns and books
Prepare an invoice-level working rather than relying on a single return statement. GSTN advises taxpayers to reconcile GSTR-2B with their books, avoid claiming the same credit twice, and reverse credit as required by the Act and Rules. It also says the system-generated statement does not capture every legal restriction that may require self-assessment. See the GSTN GSTR-2B FAQ and its GSTR-2B advisory.
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For every line, trace the amount from source document to purchase register and ledger, then to the relevant GSTR-2B period and GSTR-3B claim. Include any reversal, subsequent reclaim, amendment, payment or correction, with the tax period in which it was reported. The “ITC not available” classification in GSTR-2B reflects specified cases; its presence or absence is not, by itself, a final ruling on legal entitlement.
| Reconciliation point | What to record |
|---|---|
| Notice allegation | Invoice or item reference, cited ground, tax period and amount proposed |
| Books and source document | Invoice/debit note details, supplier GSTIN, taxable value and tax; purchase-register and ledger entries |
| Return treatment | GSTR-2B period and status, GSTR-3B claim, plus any reversal, reclaim or amendment and its reporting period |
| Transaction evidence | Payment date and reference, receipt or service evidence, and relevant business-use facts, according to the allegation |
| Response position | Whether the item is accepted, disputed or needs correction; supporting exhibit number and tax/interest/penalty impact |
This comparison helps expose duplicate amounts, a wrong GSTIN or period, prior reversal or payment, arithmetic errors, and mismatches between the notice calculation and your records. Keep each disputed item distinct: different invoices in the same notice may have different facts or legal treatment.
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Keep an indexed evidence file for the notice
Create a folder for the notice and tax period, with an index that points to each exhibit. Preserve original electronic files as well as readable exports, and maintain the source-document-to-ledger-to-return trail. This is a practical filing method, not a prescribed statutory format. The CBIC’s accounts and records rules address accounts and supporting documents, source documents and audit-trail information; apply the specific requirements to your taxpayer status and circumstances.
- Notice and correspondence: complete notice, annexures, portal summary, service information, earlier replies and relevant department correspondence.
- Transaction documents: purchase invoice or debit note, purchase order or contract, delivery challan, goods receipt note, e-way bill, proof of service or business use, and relevant vendor communications.
- Payment evidence: bank statement extract or payment advice and supplier ledger, particularly if the allegation concerns payment timing.
- Books and returns: purchase register, general ledger, GSTR-2B and relevant earlier or later statements, GSTR-3B, and the reconciliation showing how each figure was derived.
- Credit adjustments: credit notes, reversals, reclaims or amendments, with evidence of when and where each was reported.
- Response materials: issue-by-issue reply, calculation and numbered exhibit index.
Include documents that help decide the allegation, not unrelated paperwork simply to make the bundle larger. Redact unrelated personal or commercially sensitive information where appropriate, without obscuring evidence needed to decide the issue.
Build the reply around facts, calculations and the cited ground
For each disputed item, state what the department alleges, what your records show, which legal condition is in dispute, and what the attached evidence establishes. Tie figures back to the notice calculation and identify any amount you accept separately from amounts you dispute. If you believe a credit is ineligible or a return entry is wrong, do not obscure that point with a blanket denial; assess the correction or payment implications with a qualified GST adviser.
- Confirm the scope. List every invoice or item, period, legal ground, calculation and response date from the notice.
- Recalculate the proposed amount. Rework the department’s figures and check for duplicate entries, wrong periods or GSTINs, earlier reversals or payments, and arithmetic differences.
- Complete the reconciliation. Connect each notice line to the source document, books, GSTR-2B, GSTR-3B, payment or receipt evidence, and any adjustment.
- Explain the position item by item. Address the legal ground actually cited, refer to exhibits by number, and state the relief or correction sought.
- File using the applicable route and form. Follow the complete notice, current rules and portal instructions, and save the filed reply, attachments, acknowledgement or ARN, and a portal receipt or screenshot.
- Track subsequent steps. Preserve any hearing notice, hearing submission, order, payment evidence and applicable rectification or appeal dates.
Use the form and deadline that apply to this notice
Under the cited text of CGST Rule 142, where a notice summary is uploaded electronically in FORM GST DRC-01, the reply is furnished in FORM GST DRC-06. The same rule text describes DRC-03 for reporting specified payments and DRC-07 as the electronic summary of specified orders; those forms are not substitutes for the notice reply. The CBIC rules PDF linked here is an older consolidated file, so check later amendments, the live notice and current portal instructions before filing: CBIC CGST Rules, Rule 142.
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Do not infer a universal response deadline from the form name or from a generic checklist. The applicable date and filing route depend on the complete notice, relevant tax period and current law. If the deadline is close, the notice is unclear, or the amount or legal issue is material, seek advice from a qualified GST practitioner promptly.
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