FinoPulse #007 · MAY 08, 2026
Your Monthly GST Update
finoscape.com
Imagine a GST audit team knocking on your door, asking for your Rule 42 and 43 workings. What would you do?
Rule 42 and 43 of the CGST Rules, 2017, deal with the reversal of input tax credit.
As a business owner, it’s essential to understand the rules and regulations surrounding input tax credit reversal. Failure to comply can result in hefty fines and penalties.
You must ensure that your business is accurately claiming input tax credit and reversing it when necessary. This will help you avoid any potential disputes with the GST authorities.
A large pharmaceutical company in Ahmedabad was claiming full ITC on its marketing overheads for two years. However, when a GST audit team arrived, they were unable to produce the necessary documents, resulting in a reversal demand of ₹1.2 crores plus 18% interest.
Our experts recommend that you review your input tax credit claims and ensure that you are complying with the rules and regulations.
- Review your input tax credit claims
- Ensure compliance with Rule 42 and 43
- Consult with a tax expert if necessary
What it says: GSTR-2B is a statement that shows the input tax credit available to a taxpayer.
What it means: You must reconcile your GSTR-2B with your actual input tax credit claims to avoid any discrepancies.
When it applies: You must reconcile your GSTR-2B on a monthly basis.
Common mistakes: Failure to reconcile GSTR-2B, incorrect input tax credit claims, and not maintaining proper records.
The GST Council has announced new rates for certain goods and services, effective May 1, 2026.
These changes will impact your business, so it’s essential to review and update your pricing and tax calculations accordingly.
The GST Council has announced new rates for certain goods and services, effective May 1, 2026.
These changes will impact your business, so it’s essential to review and update your pricing and tax calculations accordingly.
The GST Council has announced the removal of exemptions on certain services, effective May 1, 2026.
These changes will impact your business, so it’s essential to review and update your pricing and tax calculations accordingly.
What is the purpose of GSTR-2B reconciliation?
India’s Tax Intelligence Hub