ELECTRINIC CREDIT
LEDGER AND RECLAIMED STATEMENT ADVISORY
The Goods and Services Tax Act 2017 came into force with
effect from 1.7.2017 in India.
In the GST Portal amendment facilities were introduced to
reverse the ineligible Input Tax Credit permanently or temporarily and hence
the taxpayers can claim correct Input Tax Credit which is eligible and the
taxpayers can reverse the ineligible Input Tax Credit. There are some doubts in
reversing the ineligible ITC and hence the GSTN has issued the following Advosory
to taxpayers in GST Portal.
The corrections
must be done before 30.9.2023
The Advisory issued by the GSTN is given below for ready
reference.
Introducing Electronic Credit Reversal and Reclaimed statement
31/08/2023
“Vide Notification No.
14/2022 – Central Tax dated 05th July, 2022 (read with circular
170/02/2022-GST, Dated 6th July,2022), the Government introduced certain
changes in Table 4 of Form GSTR-3B so as to enable the taxpayers in reporting
correct information regarding ITC availed, ITC reversal, ITC re-claimed and
ineligible ITC. The re-claimable ITC earlier reversed in Table 4(B)2 may be
subsequently claimed in Table 4(A)5 on fulfilment of necessary conditions. Such
reclaimed ITC in Table 4(A)5 also needs to be explicitly reported in Table
4D(1)..
In order to facilitate
the taxpayers in correct and accurate reporting of ITC reversal and reclaim
thereof and to avoid clerical mistakes, a new ledger namely Electronic
Credit and Re-claimed Statement is being introduced on the GST portal.
This statement will help the taxpayers in tracking of their ITC that has been
reversed in Table 4B(2) and thereafter re-claimed in Table 4D(1) and 4A(5) for
each return period, starting from August return period. For a detailed advisory
please click here .”
Thanking you,
Team GSTN
Introducing
Electronic Credit Reversal and Re-claimed statement on GSTN
The
Government has notified certain changes in Table 4 of Form GSTR-3B to enable
taxpayers in reporting correct information regarding ITC availed, ITC reversal,
ITC re-claimed and ineligible ITC vide Notification No. 14/2022 – Central Tax
dated 05th July, 2022 (read with circular 170/02/2022-GST, Dated 6 th July,2022).
Accordingly, the reclaimable ITC earlier reversed in Table 4(B)2 may be
subsequently claimed in Table 4(A)5 on fulfilment of necessary conditions. Such
reclaimed ITC in Table 4(A)5 also needs to be explicitly reported in Table
4D(1).
1) In order
to facilitate the taxpayers in correct and accurate reporting of ITC reversal
and reclaim thereof and to avoid clerical mistakes, a new ledger namely
Electronic Credit and Re-claimed Statement is being introduced on the GST
portal. This statement will help the taxpayers in tracking of their ITC that
has been reversed in Table 4B(2) and thereafter re-claimed in Table 4D(1) and
4A(5) for each return period, starting from August return period.
2) This
statement shall facilitate that while re-claiming ITC in GSTR-3B, the amount
aligns appropriately with the corresponding reversed ITC. This aims to improve
the overall consistency and correctness of ITC reversal and re-claims related
transactions. For Monthly taxpayers, the specified return period pertains to August
2023. For those filing quarterly returns, the specified return period
corresponds to Q2 of the financial year 2023-24, encompassing the months of
JulySeptember 2023.
3)
Taxpayers are being provided a facility to report their cumulative ITC reversal
(ITC that has been reversed earlier and has not yet been reclaimed) as opening
balance for “Electronic Credit Reversal and Re-claimed Statement”, if any. The
navigation to report ITC reversal balance: Login >> Report ITC Reversal
Opening Balance. or Services >> Ledger >> Electronic Credit
Reversal and Re-claimed Statement >> Report ITC Reversal Opening Balance
a. Taxpayers having monthly filing frequency are required to report their
opening balance considering the ITC reversal done till the return period of
July 2023. b. In contrast, quarterly taxpayers shall report their opening
balance up to Q1 of the financial year 2023-24, considering the ITC reversal
made till the April-June 2023 return period. c. The taxpayers have the
opportunity to declare their opening balance for ITC reversal Until 30 th
November 2023. d. The taxpayers shall also be provided 3 (three) amendment
opportunities to correct their opening balance in case of any mistakes or
inaccuracies in reporting. Importantly, until 30th November 2023, both
reporting and amendment facilities are accessible. e. However, after 30th
November till 31st December 2023, only amendments will be permitted and the
option for fresh reporting will not be available. This amendment facility shall
be discontinued after 31st December 2023. 4) With the provision for taxpayers
to report their accumulated ITC reversal balance, the portal will subsequently
maintain a record of reversal and re-claimed amounts on a return period basis
in statement. Hence, a validation mechanism is incorporated into the GSTR-3B
form. This validation will trigger a warning message if a taxpayer attempts to
re-claim excess ITC in table 4D(1) than the available ITC reversal balance in
the statement along with ITC reversal made in current return period in Table
4B(2). This warning message would facilitate accurate reporting but the
taxpayers will still have the option to proceed with filing. However, the
taxpayers are advised not to reclaim ITC exceeding the closing balance of
“Electronic Credit Reversal and Re-claimed Statement” and may report their
pending reversed ITC, if any, as ITC reversal opening balance. 5) For monthly
taxpayers, the warning message will commence appearing from the GSTR-3B filing
for the August 2023 return period. Similarly, for quarterly taxpayers this
warning message would start from the filing period covering July to September
2023.
