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Not as a universal rule. A missing entry in GSTR-2A does not, by itself, settle every input tax credit (ITC) dispute. The result depends on the tax period, the kind of transaction, the applicable statutory conditions and rules, and the evidence explaining the mismatch. For ordinary domestic invoices from 1 January 2022, the central-law and CBIC position generally looks to supplier reporting and communication in GSTR-2B, not merely whether an entry appears in GSTR-2A. A Gauhati High Court decision provides a significant qualification for some bona fide purchasers facing a defaulting supplier, but it is not a nationwide Supreme Court ruling.
Why the tax period changes the answer
The relevant rules changed over time. In an older period, an officer examining ITC claimed in GSTR-3B but absent from GSTR-2A must apply the law and any mismatch limit in force for that period. From 1 January 2022, section 16(2)(aa) added a supplier-reporting and communication condition tied to GSTR-2B for covered supplies. Do not apply a later condition or an earlier percentage cap to a different tax period.
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| Tax period | Applicable mismatch framework |
|---|---|
| 1 July 2017–8 October 2019 | Rule 36(4) was not yet in force, according to CBIC Circular 193/05/2023-GST, dated 17 July 2023. Section 16 eligibility conditions still applied. The circular says Circular 183/15/2022-GST guidance applies in toto for 1 April–8 October 2019; that guidance does not mean every credit absent from 2A is automatically allowable. |
| 9 October–31 December 2019 | Rule 36(4) allowed unreported credit up to 20% of eligible credit reported by suppliers. CBIC Circular 193/05/2023-GST records this ceiling and says the earlier mismatch-verification guidance was also used for relevant section 16(2)(c) verification, subject to the ceiling. |
| 1 January–31 December 2020 | The rule 36(4) ceiling was 10% of eligible reported credit, with a cumulative adjustment for February–August 2020 in the September return under the stated amendment. Source: CBIC Circular 193/05/2023-GST. |
| 1 January–31 December 2021 | The ceiling was 5% of eligible reported credit, with a cumulative adjustment for April–June 2021 in the June return under the stated amendment. Source: CBIC Circular 193/05/2023-GST. |
| From 1 January 2022 | For covered supplies, section 16(2)(aa) and the amended rule require supplier reporting and communication of invoice details in GSTR-2B under the CBIC position. Other section 16 conditions continue to apply. |
The historical 20%, 10% and 5% figures are ceilings for unreported invoices against eligible reported credit, not blanket entitlements or general tolerances for errors. Circular 193 says its clarifications for the specified 1 April 2019–31 December 2021 mismatch periods apply to ongoing scrutiny, audit, investigation and pending adjudication or appeal, not to completed proceedings. The circulars’ detailed documentary requirements should be checked for the particular period and claim.
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Section 16(2) sets out conditions for ITC, including possession of a prescribed tax invoice, receipt of the goods or services, the supplier’s payment of tax subject to the statutory provisions, and filing the recipient’s return. Clause (aa), effective from 1 January 2022, adds that the supplier must furnish invoice details and that they must be communicated to the recipient. Read the applicable version of section 16, including clause (ba), and rule 36 for the tax period and transaction.
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CBIC Circular 193/05/2023-GST states: “Further, w.e.f. 01.01.2022, consequent to insertion of clause (aa) to sub-section (2) of section 16 of the CGST Act, ITC can be availed only up to the extent communicated in FORM GSTR-2B.” For an ordinary domestic supplier invoice covered by this condition, the administrative position is therefore stricter than simply asking whether the recipient has an invoice or paid the supplier. Payment alone does not satisfy every statutory condition.
A missing GSTR-2A entry can be a clue to investigate, but it does not identify the reason for the gap. The issue may involve non-reporting, late reporting, incorrect particulars, or a transaction category for which the expected statement entry is different. Establish what happened invoice by invoice; do not treat every 2A mismatch as the same legal problem.
When a supplier defaults: the Gauhati High Court qualification
In MCLEOD Russel India Limited on 9 December 2025, the Gauhati High Court did not strike down section 16(2)(aa), but read it down temporarily. Where a supplier acts truant, the court said a bona fide purchaser must have an opportunity to prove its bona fides using tax invoices and other documents before ITC is denied. The court’s approach lasts until CBIC provides a practical solution.
This is a material qualification for a purchaser who says it complied but cannot obtain the supplier’s cooperation. It does not establish that every buyer facing supplier non-filing must receive credit, nor does it displace the other statutory requirements. The cited decision is from the Gauhati High Court; the authorities cited here do not establish a nationwide Supreme Court ruling adopting the same approach. The applicable State or Union Territory GST enactment and any binding precedent for the taxpayer’s jurisdiction also matter.
Why transaction type and supporting records matter
A 2A gap does not mean the same thing for every kind of credit. In Biocon Limited on 30 April 2026, the Karnataka High Court considered a 2018–19 mismatch demand that included import and SEZ credits. The record showed those credits were not reflected in 2A by design; the court noted the Bill of Entry as the relevant import-credit document and set aside that part of the demand. That decision concerns its facts and an earlier tax period; it does not decide the post-2021 treatment of ordinary domestic supplier invoices.
For a mismatch response, identify whether each disputed amount relates to an ordinary domestic forward-charge invoice, an import, an SEZ supply, reverse charge, or another category. Then use records appropriate to that transaction. A Bill of Entry may be relevant for import credit; an invoice alone may not answer a dispute about receipt, supplier reporting, or another statutory condition.
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How to prepare a response to an ITC mismatch notice
- Identify the disputed period and invoices. Make a line-by-line list of the amounts challenged and the tax periods they belong to. Apply the rule version and any historical cap applicable to each period.
- Reconcile the returns and ledger. Compare the purchase ledger with the relevant GSTR-3B claims and GSTR-2A and GSTR-2B entries. Mark whether each gap appears to arise from non-reporting, timing, incorrect particulars, transaction type, or another identifiable cause.
- Collect transaction evidence. Keep the tax invoice or debit note, proof that the goods or services were received, payment records, supplier communications and available evidence of supplier reporting or tax payment. Add transaction-specific records, such as a Bill of Entry for an import, where relevant.
- Address each legal condition and the notice. Explain how the evidence supports the applicable section 16 conditions and, for an earlier period, how the relevant rule 36(4) ceiling and circular guidance apply. Respond to the show-cause notice and attend hearings as required; a mismatch explanation does not replace procedural compliance.
- Check jurisdiction and case status. Confirm the applicable State or Union Territory enactment, relevant binding decisions and whether a circular’s scope covers the stage of the proceeding. For an individual dispute, obtain advice from a qualified Indian GST professional.
What the cited cases do—and do not—establish
The decisions illustrate why a bare mismatch figure is not a substitute for examining the facts and procedure. In Hindustan Construction Company Ltd on 28 November 2025, the Karnataka High Court dealt with 2017–18 and 2018–19 mismatch proceedings and reproduced the historical CBIC framework; it is early-period context, not a post-2021 holding. In Andromeda Sales and Distribution on 10 February 2026, the Telangana High Court directed the taxpayer to pursue the appellate remedy in a matter involving failure to provide supporting evidence, answer the show-cause notice and attend hearings. That outcome highlights procedural risk; it does not establish that a 2A mismatch alone always proves ITC ineligibility.
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This article reflects the central-law materials and decisions identified through 4 October 2026. GST treatment can turn on later amendments, subsequent decisions, the State or Union Territory law, and the taxpayer’s facts.
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