SECTION-43. Matching, reversal and reclaim of reduction in output tax liability.—

43. Matching, reversal and reclaim of reduction in output tax liability.—

(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
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