Chapter IX - Returns
Section 38
Section 38: Communication of details of inward supplies and input tax credit
Section 38 provides the recipient with an electronic inward-supply and input-tax-credit statement identifying potentially available and restricted credit.
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Need advice on Section 38?
This article is for general information. Refer to the Central Goods and Services Tax Act, 2017 official text for the official provisions. If you need professional advice for your situation, contact Bizeneed.
Statutory text
Bare law
(1) The details of outward supplies furnished by the registered persons under sub-section (1) of section 37 and of such other supplies as may be prescribed, and a statement containing the details of input tax credit shall be made available electronically to the recipients of such supplies in such form and manner, within such time, and subject to such conditions and restrictions as may be prescribed.
(2) The statement referred in sub-section (1) shall consist of–– (a) details of inward supplies in respect of which credit of input tax may be available to the recipient; (b) details of supplies in respect of which such credit cannot be availed, whether wholly or partly, by the recipient, including on account of the details of the said supplies being furnished under sub- section (1) of section 37,–– (i) by any registered person within such period of taking registration as may be prescribed; or (ii) by any registered person, who has defaulted in payment of tax and where such default has continued for such period as may be prescribed; or (iii) by any registered person, the output tax payable by whom in accordance with the statement of outward supplies furnished by him under the said sub-section during such period, as may be prescribed, exceeds the output tax paid by him during the said period by such limit as may be prescribed; or (iv) by any registered person who, during such period as may be prescribed, has availed credit of input tax of an amount that exceeds the credit that can be availed by him in accordance with clause (a), by such limit as may be prescribed; or (v) by any registered person, who has defaulted in discharging his tax liability in accordance with the provisions of sub-section (12) of section 49 subject to such conditions and restrictions as may be prescribed; or (vi) by such other class of persons as may be prescribed. (c) such other details as may be prescribed.
Introduction
The recipient statement draws on suppliers’ section 37 details and other prescribed supplies. It indicates credit that may be available and supplies for which credit cannot be availed wholly or partly.
Key takeaways
Recipient statement
The statute calls this a “statement” after the 2025 amendment. Its form, timing and conditions are prescribed; it is not itself a standalone grant of credit.
Available credit
One component shows inward supplies in respect of which input tax credit may be available to the recipient. The substantive eligibility tests in sections 16 and 17 still matter.
Restricted credit
Another component identifies supplies for which credit cannot be availed wholly or partly, including specified supplier-side defaults or newly registered suppliers within prescribed periods.
Why supplier review matters
The statutory restrictions include discrepancies between outward tax and tax paid, excess supplier credit claims and defaults under section 49(12), each subject to prescribed periods, limits and conditions.
Recipient statement
The statute calls this a “statement” after the 2025 amendment. Its form, timing and conditions are prescribed; it is not itself a standalone grant of credit.
Available credit
One component shows inward supplies in respect of which input tax credit may be available to the recipient. The substantive eligibility tests in sections 16 and 17 still matter.
Restricted credit
Another component identifies supplies for which credit cannot be availed wholly or partly, including specified supplier-side defaults or newly registered suppliers within prescribed periods.
Why supplier review matters
The statutory restrictions include discrepancies between outward tax and tax paid, excess supplier credit claims and defaults under section 49(12), each subject to prescribed periods, limits and conditions.
Practical checklist
Do
- Compare the statement with purchase invoices and goods or service receipt.
- Investigate a restricted-credit flag before claiming ITC.
- Apply sections 16 and 17 and current Rules to the specific invoice.
Avoid
- Rely on an old portal deadline without checking current Rules and notifications.
Frequently asked questions
Does appearance as available credit guarantee ITC?
No. Section 38 communicates information; the recipient must still satisfy the Act’s eligibility and restriction rules.
Need help applying this provision to your situation?
Contact BizeneedLast updated 10 October 2026