GST return in Form GSTR-3B is a self-declaration statement that needs to be filed on a monthly or quarterly basis. Table 4 of GSTR-3B deals with eligible ITC i.e. ITC availed; ITC reversed as well as ineligible ITC.
With the objective of correct reporting of ITC (i.e. Input Tax Credit) in Table 4 of GSTR-3B, a few changes were notified by the Government vide notification no.14/2022-Central Tax dated 5th July 2022.
Post the said amendment in Table 4 of GSTR-3B, reporting of ITC reversal became complex. So, to facilitate the taxpayer, the Goods and Services Tax Network i.e. GSTN introduced ‘Electronic Credit Reversal and Reclaimed Statement’.
This article briefly explains Table 4 of GSTR-3B as well as Electronic Credit Reversal and Reclaimed Statement.
Electronic Credit Reversal | Table 4 of GSTR-3B
Changes notified in Table 4 of GSTR-3B were incorporated and made available on GST from 1st September 2022. Let us first go through the new format of Table 4 of GSTR-3B which is summarized hereunder –
Details | IGST | SGST | SGST/UTGST | Cess |
|---|---|---|---|---|
(A) ITC Available (whether in full or part) | ||||
(1) Import of goods | XX | XX | XX | XX |
(2) Import of services | XX | XX | XX | XX |
(3) Inward supplies liable to reverse charge (other than 1&2 above) | XX | XX | XX | XX |
(4) Inward supplies from ISD | XX | XX | XX | XX |
(5) All other ITC | XX | XX | XX | XX |
(B) ITC Reversed | ||||
(1) As per rules 38, 42 and 43 of CGST Rules and Section 17(5) | XX | XX | XX | XX |
(2) Others | XX | XX | XX | XX |
(C) Net ITC Available (A) – (B) | ||||
(D) Other Details | ||||
(1) ITC reclaimed which was reversed under Table 4(B)(2) in earlier tax period | XX | XX | XX | XX |
(2) Ineligible ITC under section 16(4) and ITC restricted due to PoS provisions. | XX | XX | XX | XX |
Reversal of ITC |Non-reclaimable |Table 4(B)(1)
Permanent reversal which cannot be reclaimed is to be reported here. Such permanent reversal of ITC can be due to any of the following reasons.
- Tax paid on input/input services that are used for non-business purposes by a banking company/financial institution [rule 38 CGST].
- ITC on input/input services that are partly used for business purposes and partly used for other purposes or ITC used for both taxable and exempt supplies [rule 42 CGST].
- Tax paid on capital goods that are used for both taxable and exempt supplies [rule 43 CGST].
- Blocked ITC in terms of Section 17(5) CGST.
Reversal of ITC | Reclaimable |Table 4(B)(2)
Temporary reversal which can be reclaimed is to be reported here. Notably,
- Table 4(A)(5) – ITC reversed in table 4(B)(2) can be reclaimed in table 4(A)(5).
- Table 4(D)(1) – The ITC reclaimed in table 4(A)(5) is to be reported in table 4(D)(1).
Basics of Electronic Credit Reversal and Reclaimed Statement
GSTN introduced ‘Electronic Credit Reversal and Reclaimed Statement’ intending to facilitate the taxpayer to correctly and accurately report and track ITC reversal [that has to be reversed in Table 4(B)(1)] and reclaimed [that has to be reclaimed in Table 4(A)(5) and Table 4(D)(1)].
The Electronic Credit Reversal and Reclaimed Statement is made available on the GST portal starting from the return period of August 2023. To avail of the facility, the taxpayer needs to take care of the following points –
Report opening for Electronic Credit Reversal and Reclaimed Statement-
Based on the return filing requirement, the taxpayer needs to report the opening balance of ITC reversal by 30th November 2023 in the following manner.
- Monthly : Such taxpayers are required to report the opening balance by considering the ITC reversal done till the return period of July 2023.
- Quarterly : Such taxpayers are required to report the opening balance by considering the ITC reversal done till the return period of the quarter of April-June 2023.
Opportunity to rectify the mistake/inaccuracy in opening balance reported for Electronic Credit Reversal and Reclaimed Statement
Post reporting the opening balance, the taxpayer is given three amendment opportunities to correct the mistake/inaccuracy, if any in the reported opening balance.
Such amendment opportunity is available to the taxpayer only from 30th November 2023 till 31st December 2023. The amendment opportunity will be discontinued after 31st December 2023.Working of Electronic Credit Reversal and Reclaimed Statement
The working of Electronic Credit Reversal and Reclaimed Statement is explained with the help of the following flowchart
Probable consequence of excess reclaim of ITC as compared to the amount reflected in Electronic Credit Reversal and Reclaimed Statement –
It is important to note that in case of excess reclaim of ITC, the system will trigger a warning message. However, there is no restriction on availing excess reclaim of ITC in Form GSTR-3B.
In case the excess amount is reclaimed, Form DRC-01C can be issued to the taxpayer asking about the reason for availing such excess ITC.
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