A GST notice alleging that input tax credit was claimed on invoices bearing the wrong GSTIN is a common scrutiny and demand trigger. The department’s position is often that the invoice does not support the credit because the recipient’s GSTIN is incorrect. The taxpayer’s response depends on whether the error is a genuine, bona fide mistake and whether the underlying supply is substantiated.
The Delhi High Court in B Braun Medical India (P.) Ltd. v. Union of India set aside an order denying ITC solely on the ground that the invoice mentioned the Bombay office GSTIN instead of the Delhi office GSTIN. The Court held that the only basis for rejecting the credit was the mention of the wrong GSTIN, and that the credit could not be denied on that basis alone. The Tripura High Court has similarly held that ITC cannot be denied for a bona fide GSTIN reporting mistake.
The Bona Fide Error Standard
The B Braun ruling rests on the distinction between a substantive entitlement and a procedural defect. The taxpayer had received the goods or services, the supplier had paid the tax, and the only defect was the GSTIN on the invoice. The Court treated the wrong GSTIN as a curable procedural error, not as a ground to deny the substantive credit. The taxpayer should therefore lead with the substantive facts: the receipt of the supply, the payment, the supplier’s tax payment and the business use.
The Same-PAN, Different-GSTIN Situation
Where the wrong GSTIN belongs to the same PAN but a different registration—for example, the Bombay office instead of the Delhi office—the taxpayer should demonstrate that the supply was received by the entity that claimed the credit and that the GSTIN error was inadvertent. The reconciliation should show the invoice, the receiving location, the payment and the credit entry. A certificate from the supplier confirming the error and the correct GSTIN can strengthen the reply.
The Supplier-Side Error
Where the supplier reported the invoice under the wrong GSTIN in GSTR-1, the credit may not appear in the recipient’s GSTR-2B. The taxpayer should obtain the supplier’s confirmation, the supplier’s GSTR-1 amendment, or a certificate explaining the error. The recipient should not be penalised for a supplier-side reporting error where the supply is genuine and the tax has been paid.
The Limits of the Bona Fide Argument
The bona fide error argument is not a licence to claim credit on invoices that do not relate to the recipient’s business or that are fabricated. Where the wrong GSTIN is part of a broader pattern of bogus invoices or circular trading, the department can deny the credit on fraud grounds. The taxpayer should ensure that the invoice, the e-way bill, the payment and the receipt of goods or services are all consistent and that the supplier is a genuine registered person.
What the Taxpayer Should Control
The wrong-GSTIN outcome depends on three variables: whether the error is bona fide and isolated; whether the substantive supply, payment and tax payment are documented; and whether the supplier cooperates in correcting or confirming the invoice. The taxpayer that controls these variables can rely on the B Braun line of authority to resist a denial based solely on the GSTIN error.
Call to Action: We advise taxpayers on wrong-GSTIN notices, B Braun-based replies and the reconciliation evidence that supports ITC. For an ITC-dispute review, contact office@anujdesaiassociates.com, Ph No. 9619456656, Website https://anujdesaiassociates.com, LinkedIn linkedin.com/in/ca-anuj-desai-122547230.