Section 43 - Matching, reversal and reclaim of reduction in output tax liability of CGST ACT, 2017

            43. (1) The details of every credit note relating to outward supply furnished by a
registered person (hereafter in this section referred to as the “supplier”) for a tax period shall,
in such manner and within such time as may be prescribed, be matched––
                      (a) with the corresponding reduction in the claim for input tax credit by the
corresponding registered person (hereafter in this section referred to as the “recipient”)
in his valid return for the same tax period or any subsequent tax period; and
                      (b) for duplication of claims for reduction in output tax liability.
                (2) The claim for reduction in output tax liability by the supplier that matches with the
corresponding reduction in the claim for input tax credit by the recipient shall be finally
accepted and communicated, in such manner as may be prescribed, to the supplier.
                (3) Where the reduction of output tax liability in respect of outward supplies exceeds
the corresponding reduction in the claim for input tax credit or the corresponding credit note
is not declared by the recipient in his valid returns, the discrepancy shall be communicated
to both such persons in such manner as may be prescribed.
                (4) The duplication of claims for reduction in output tax liability shall be communicated
to the supplier in such manner as may be prescribed.
                (5) The amount in respect of which any discrepancy is communicated under
sub-section (3) and which is not rectified by the recipient in his valid return for the month in
which discrepancy is communicated shall be added to the output tax liability of the supplier,
in such manner as may be prescribed, in his return for the month succeeding the month in
which the discrepancy is communicated.
               (6) The amount in respect of any reduction in output tax liability that is found to be on
account of duplication of claims shall be added to the output tax liability of the supplier in his
return for the month in which such duplication is communicated.
               (7) The supplier shall be eligible to reduce, from his output tax liability, the amount
added under sub-section (5) if the recipient declares the details of the credit note in his valid
return within the time specified in sub-section (9) of section 39.
               (8) A supplier in whose output tax liability any amount has been added under
sub-section (5) or sub-section (6), shall be liable to pay interest at the rate specified under
sub-section (1) of section 50 in respect of the amount so added from the date of such claim
for reduction in the output tax liability till the corresponding additions are made under the
said sub-sections.
              (9) Where any reduction in output tax liability is accepted under sub-section (7), the
interest paid under sub-section (8) shall be refunded to the supplier by crediting the amount
in the corresponding head of his electronic cash ledger in such manner as may be prescribed:
         Provided that the amount of interest to be credited in any case shall not exceed the
amount of interest paid by the recipient.
              (10) The amount reduced from output tax liability in contravention of the provisions of
sub-section (7) shall be added to the output tax liability of the supplier in his return for the
month in which such contravention takes place and such supplier shall be liable to pay
interest on the amount so added at the rate specified in sub-section (3) of section 50.

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