What does section 42 regulate?

It regulates matching, reversal and reclaim of input tax credit. Read the exact text, conditions, exceptions and transaction date together.

Which subordinate law should be checked?

No direct CGST Rule has been listed in this repository. 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.

Is section 42 still operative under the CGST Act?

No for current-period application. Section 42 is shown as omitted in the current consolidated Act, but it may remain relevant to a historical period when it was in force.

Can section 42 still matter for an old GST period?

Apply section 42 to the exact facts and period, then verify the linked delegated law and official implementation material before concluding.

Which historical Rules and returns should be checked with section 42?

Use the Section–Rule–Form–Notification bridge on this page, then verify the current official Rule/instrument before applying it.

Can today’s GST portal process be applied to the old matching regime?

No. A current portal workflow cannot by itself reconstruct a superseded statutory mechanism. Use the law, Rules, forms and system evidence applicable to the historical period.

Section 42 - Matching, reversal and reclaim of input tax credit

Reviewed by CA Nikhil Gupta and Kajri Singh · Last reviewed 30 August 2026

Chapter IX - Returns

OMITTED

Official source: The controlling wording and amendment notes are maintained by India Code and CBIC. Open consolidated Act PDF.

Finin2min Summary - Section in 2 Minutes

Historical matching provision omitted from 1 October 2022. Do not apply the old statutory matching mechanism to current periods. Current controls operate through sections 16, 38, 41, GSTR-2B/IMS and rules such as 37A/88D.

Provision position

Historical / omitted

CGST chapter

Chapter IX — Returns

Legal source control

India Code + CBIC official repositories

Law checked

27 July 2026

How to use this page: Current consolidated Act records this provision as omitted; use only for relevant historical periods and with the law then in force. The official consolidated Act controls the statutory wording; the Finin2min layers explain how to apply and evidence it.

Why Section 42 matters

Section 42 (Matching, reversal and reclaim of input tax credit) is the section-level control point within Chapter IX — Returns. Return provisions convert invoice and ITC data into statutory declarations. Cross-return consistency is as important as filing the form itself.

Current-law and amendment control

validation 1 — controlling consolidated Act

India Code — Central Goods and Services Tax Act, 2017. Used for the current chapter/section inventory and consolidated provision status.

validation 2 — independent official cross-check

CBIC Tax Information Portal. Use the Act HTML/PDF and amendment history together with current notifications/circulars.

Transaction-date rule: Never treat today’s consolidated wording, a portal screen or an enacted-but-uncommenced amendment as proof of the law that applied on another date. Fix the relevant tax period first.

Official statutory text

The authoritative provision, footnotes and amendment notes are maintained in the official consolidated Act. This analytical page does not re-typeset amendment markers into the running statutory sentence.

Official-source reference reviewed on 2026-07-28. Apply the version and commencement position relevant to the transaction period.

Clause-by-clause / paragraph-wise decode

Section–Rule–Form–Notification–Circular bridge

No direct Rule certified in Repository module. Check notifications, circulars, forms and corresponding State law.

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

Practical example

A notice citing old section 42 for a post-October 2022 period should be checked against the current legal basis.

Professional alert

Retain the omitted provision only for historical- period analysis.

Finin2min decision path

Fix the historic tax period first.
Confirm that the issue arose while the provision was operative.
Read the historical statutory text and Rules/forms then in force.
Do not use a current portal workflow to reconstruct an old statutory requirement without evidence.
Link the conclusion to later replacement provisions where relevant.

Practical case studies

Case 1 — Historic-period case — A dispute refers to section 42. First establish whether the tax period falls before the omission and retrieve the statutory/return framework then in force.

Case 2 — Transition case — Current return architecture differs from the historic matching mechanism. Do not infer old legal consequences solely from today’s portal screens.

Case 3 — Litigation case — Preserve old returns, notices, system extracts and amendment notifications because current consolidated text intentionally no longer contains the operative mechanism.

Accounting, ERP & portal touchpoints

Return automation should retain mapping from ledger/tax code to return table, amendment period and source document, with exception reports.

Control: keep the legal conclusion separate from system configuration; document every tax-code/master change and its effective date.

Notice, litigation & evidence risk

Return mismatches are easy for tax systems to identify. Preserve reconciliations and reasons for every material variance.

Evidence hierarchy: source transaction → books/ERP → statutory return/form → portal acknowledgement → legal working → correspondence/order.

Judicial position — how to read precedent

Start with binding Supreme Court authority, then the jurisdictional High Court, other High Courts and GSTAT where applicable. AAR/AAAR rulings are fact- and jurisdiction-sensitive and should not be presented as universal law. Always check whether a decision has been stayed, reviewed, distinguished or overtaken by amendment.

Open the Finin2min provision citator · Open the connected GST case-law module

Common mistakes to avoid

Filing GSTR-1 and GSTR-3B from separate unreconciled datasets.
Carrying mismatches indefinitely without a documented action.
Assuming a filed return cannot be revised through later permitted mechanisms.
Ignoring annual-return implications of monthly differences.

Questions professionals actually ask

Is section 42 still operative under the CGST Act?: No for current-period application. Section 42 is shown as omitted in the current consolidated Act, but it may remain relevant to a historical period when it was in force.
Can section 42 still matter for an old GST period?: Apply section 42 to the exact facts and period, then verify the linked delegated law and official implementation material before concluding.
Which historical Rules and returns should be checked with section 42?: Use the Section–Rule–Form–Notification bridge on this page, then verify the current official Rule/instrument before applying it.
Can today’s GST portal process be applied to the old matching regime?: No. A current portal workflow cannot by itself reconstruct a superseded statutory mechanism. Use the law, Rules, forms and system evidence applicable to the historical period.

Related law and practical resources

Chapter IX guide Practical GST pathways CGST Rules GST Forms Notifications Circulars Provision citator Case law GST Portal controls State/UT overlays

Finin2min takeaway: Section 42 should never be applied alone. Read the exact provision, the connected Rules/forms/instruments, the transaction date, the State/UT overlay and the binding judicial position together.

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 42 regulate?: It regulates matching, reversal and reclaim of input tax credit. Read the exact text, conditions, exceptions and transaction date together.
Which subordinate law should be checked?: No direct CGST Rule has been listed in this repository. 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.

← Previous Next →