GSTN Advisory: Take Action on Reclaimed ITC Reversals Before November 30, 2023
The GST landscape saw crucial updates in July 2022, impacting the reporting of Input Tax Credit (ITC) in GSTR 3B. Notably, changes in ITC availment, reversal, and reclamation were introduced.
Notification No. 14/2022 dated 5-July-2022 & Circular 170/02/2022 dated 6- July-2022 States that 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).
New feature has been introduced in GST portal, it is called Electronic Credit and Re-claimed Statement
Objectives of ECRRS :
Applicable Effective From:
|Q2 of Financial Year 2023-24
|July 2023, August 2023, September 2023
Obligation to Report Cumulative Opening Balances
Report cumulative ITC that has been reversed earlier and has not yet been reclaimed as of specified date as opening balance in ECRRS.
Cut off timelines:
|Opening Balances Reporting
|Cut off Return Period
|Up to July 2023 return period
|Up to Q1 of FY 2023-24 (April-June 2023 return period)
Monthly Taxpayers are required to report their opening balance considering the ITC reversal done till the return period of July 2023.
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.
Last Date for Reporting : 30-November-2023. ( No fresh reporting after this date)
Last Date for Amendments: 31-December-2023. (Only 3 times)
Reconciliations: GSTR 3B vs GSTR 2B vs Books
Navigation path at GST portal to report ITC reversal balance:
Conclusion: In conclusion, businesses operating under the GST regime need to be well-versed with the changes brought about by the ECRRS feature. It offers a streamlined approach to track ITC reversals and re-claims, significantly enhancing the accuracy of reporting. Adherence to the reporting obligations and deadlines outlined in the GSTN advisory is imperative to avoid discrepancies and maintain compliance. The window for taking necessary actions, such as reporting and amendments, is limited, making timely compliance crucial.