(1) Subject to sub section (3-a) of section 20. no input tax credit shall be allowed on purchases of goods against tax invoices in excess of the amount of tax actually paid into the Government treasury.

(2) In case of any mismatch occurs in input tax credit, the selling as well as the purchasing dealers shall revise the returns within the time prescribed under sub section (4) of section 33, either incorporating or removing the tax invoice, as the case may be.

(3) Where any mismatch in input tax credit occurs, as a result of spillover transactions such mismatch shall be reconciled automatically by the online system.

(4) When the claim of input tax credit preferred by a registered dealer is not reconciled with the corresponding selling dealer with due payment of tax. the claim for input tax credit shall be disallowed.

(5) The input tax disallowed shall be adjusted,-

(a) by reducing the excess input tax credit, if any; or

(b) by enhancing the output tax payable; or

(c) by demanding the tax against the purchasing dealer:

Provided that where the claim of input tax of the dealer is reduced, the dealer shall be given an opportunity of being heard.