What does section 38 regulate?

It regulates communication of details of inward supplies and input tax credit. Read the exact text, conditions, exceptions and transaction date together.

Which subordinate law should be checked?

Rule 60. Notifications, circulars, forms and the corresponding SGST/UTGST layer may also apply.

What evidence should be retained?

Preserve the contract or transaction record, invoice or form, portal acknowledgement, payment/ledger evidence, correspondence, legal working and the official source version used.

Can portal behaviour override the statute?

No. Portal functionality is operational evidence; legal entitlement and liability remain controlled by the Act, Rules, notifications and binding decisions.

Section 38 - Communication of details of inward supplies and input tax credit

Chapter IX - Returns

ACTIVEOFFICIAL_TEXT_CAPTUREDindex,follow

Source control: The text/status on this page is tied to the official source gateway and the Phase 1 legal-review register. Open official source.

Finin2min Summary - Section in 2 Minutes

Provides electronic communication of inward-supply and ITC information, including available/restricted credit and other prescribed details. The statement is based on supplier data and prescribed risk/status conditions. The 2025 amendment supports a broader statement/IMS framework rather than a merely “auto- generated” statement. It does not independently establish all section 16 conditions.

Exact operative text

38. Communication of details of inward supplies and input tax credit.-(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.

Paragraph-wise decode

Section-Rule-Form-Notification bridge

Rule 60

The mapping is a legal concordance, not a round-robin related-link list. It is limited to instruments certified in this phase.

Practical example

An invoice appears in GSTR-2B but goods were never received. Section 38 data does not make the credit eligible.

Professional alert

Treat IMS/GSTR-2B as a control source, not a substitute for invoice, receipt, business-use, payment and blocked-credit tests.

Implementation checklist

Fix the transaction, taxable period and jurisdiction.
Read every subsection, proviso, explanation and omission marker.
Open the mapped Rule, form, notification and circular.
Test State/UT variation and portal version.
Preserve evidence, approvals, working papers and acknowledgements.
Record the conclusion, assumptions, source date and reviewer.

Evidence and retention checklist

Contract, purchase order, invoice or underlying transaction document.
Registration, return, ledger, challan and portal acknowledgement.
Official Act/Rule/notification version used and effective date.
Internal tax position paper, computation and management approval.
Correspondence, notices, replies, orders and appeal papers where applicable.

Practical Q&A

What does section 38 regulate?: It regulates communication of details of inward supplies and input tax credit. Read the exact text, conditions, exceptions and transaction date together.
Which subordinate law should be checked?: Rule 60. Notifications, circulars, forms and the corresponding SGST/UTGST layer may also apply.
What evidence should be retained?: Preserve the contract or transaction record, invoice or form, portal acknowledgement, payment/ledger evidence, correspondence, legal working and the official source version used.
Can portal behaviour override the statute?: No. Portal functionality is operational evidence; legal entitlement and liability remain controlled by the Act, Rules, notifications and binding decisions.

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