CA and CMA Certificates or Recipient Undertakings Admissible as Evidence u/s 15(3)(b)(ii) of GST Act, says CBIC Circular providing Mechanism for Reporting

The Central Board of Indirect Taxes and Customs (CBIC) has issued a circular outlining procedures for suppliers to prove compliance with Section 15(3)(b)(ii) of the Goods and Services Tax Act, 2017. This section pertains to excluding discounts offered through tax credit notes from taxable value, contingent upon the recipient reversing the corresponding input tax credit. Currently, there is no portal functionality for verifying this reversal, prompting the CBIC to suggest obtaining certificates from recipients, issued by Chartered Accountants or Cost Accountants, as evidence. These certificates or recipient undertakings are crucial for audits or investigations. The CBIC acknowledges the absence of a verification mechanism on the common portal and seeks its development. Until then, suppliers must rely on CA/CMA certificates or recipient undertakings to substantiate input tax credit reversals. This approach aligns with Section 34 of the CGST Act and ensures compliance with GST regulations concerning discounts provided via tax credit notes.