ITC Reclaim Ledger & RCM Ledger – What Professionals Must Watch Now

Over the last two years, GSTN has gradually moved from advisories and warnings to system-enforced compliance, especially in the area of Input Tax Credit (ITC). The latest Advisory & FAQs (Dec 2025) clearly signal that excess ITC claims will no longer be tolerated by the system.

1. Electronic Credit Reversal & Re-claimed Statement (ITC Reclaim Ledger): –

Introduced from:

• Aug 2023 (monthly filers)
• Jul–Sep 2023 (quarterly filers)

This ledger tracks:

• ITC temporarily reversed in Table 4(B)(2), and
• Its subsequent re-claim through Table 4(A)(5) read with 4(D)(1).

What has changed now?

• Re-claimed ITC in Table 4(D)(1) must be within the available balance of the ITC Reclaim Ledger plus current period reversal.
• Negative closing balance is not allowed.
• If negative, GSTR-3B filing will be blocked unless excess ITC is reversed—even resulting in cash liability if no ITC is available.

Conclusion: –

Eligibility alone is no longer enough; ledger balance must support the claim.

2. RCM Liability / ITC Statement (RCM Ledger): –

Introduced from:

• Aug 2024 (monthly filers)
• Jul–Sep 2024 (quarterly filers)

This statement aligns:

• RCM liability paid in Table 3.1(d) with
• RCM ITC claimed in Table 4(A)(2) & 4(A)(3).

What has changed now?

• RCM ITC claimed cannot exceed RCM tax paid + closing RCM ledger balance.
• Negative RCM balance will block GSTR-3B filing unless:
  • Additional RCM tax is paid, or
  • ITC claim is reduced.

Conclusion: –

RCM ITC earlier reversed must be reclaimed only via Table 4(A)(5), not through 4(A)(2)/(3).

3. Big Picture for GST Professionals: –

• Warning-based compliance is over.
• Ledger-based validations are here to stay.
• Past excess claims will now surface as filing blocks.
• Table 4(A)(5) has become critically important.
• Ledger reconciliation is now as vital as return filing.

4. Final Thought: –

GST compliance is moving towards system-driven discipline. For professionals, this is the right time to clean up legacy reversals, reconcile ledgers, and realign client practices before the portal forces corrections.

In GST today, a healthy ledger is as important as correct eligibility.