CA/CMA Certificate Requirement for Reversal of ITC

The Central Board of Indirect Taxes and Customs (CBIC) has notified Mechanism for providing evidence of compliance with conditions of Section 15(3)(b)(ii) of the CGST Act, 2017 by the suppliers via issuing Circular.

Clarification issued for verifying the reversal of ITC by recipients when discounts are offered by suppliers through credit notes post supply, given as under:

1. Suppliers need to procure a certificate containing UDIN (Unique Document Identification No.) from the recipient of the supply, issued by the CA or CMA saying that the recipient has reversed the proportionate ITC in respect of such credit if such amount of tax (CGST +SGST + IGST and including compensation Cess, if any) involved in the discount given by the supplier to a recipient through tax credit note in a Financial Year is more than Rs. 5,00,000.

2. If the amount of ITC involved is less than Rs.5,00,000, the supplier may obtain an undertaking/self-certificate from the recipient.

3. These certificates/undertakings can be provided by the concerned taxpayer before the Tax Officers during any proceedings as evidence of the necessary reversal of ITC by his recipients for previous periods as well.

For Official Circular Download PDF Given Below: