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The CBIC has issued Circular No. 170/02/2022 – GST dated 06.07.2022 mandating the furnishing of correct and proper information of inter-State supplies and amount of ineligible/blocked Input Tax Credit and reversal thereof in return in FORM GSTR-3B and statement in FORM GSTR-1a. In this article an attempt is made to understand the crux of the circular issued.

Furnishing of information regarding inter-State supplies made to unregistered persons, composition taxable persons and UIN holders in table 3.2 of GSTR-3B.

The government vide this circular has advised that the registered persons making inter-State supplies–

(i) to the unregistered persons, shall also report the details of such supplies, place of supply-wise, in Table 3.2 of FORM GSTR-3B and Table 7B or Table 5 or Table 9/10 of FORM GSTR-1,as the case may be;

(ii) to the registered persons paying tax under section 10 of the SGST/CGST Act (composition taxable persons) and to UIN holders, shall also report the details of such supplies, place of supply-wise, in Table 3.2 of FORM GSTR-3B and Table 4A or 4C or 9 of FORM GSTR-1,as the case may be;

(iii) shall update their customer database properly with correct State name and ensure that correct PoS is declared in the tax invoice and in Table 3.2 of FORM GSTR-3B while filing their return, so that tax reaches the Consumption State as per the principles of destination-based taxation system;

(iv) Further it was advised that any amendment carried out in Table 9 or Table 10 of FORM GSTR-1or any entry in Table 11 of FORM GSTR-1 relating to such supplies should also be given effect to while reporting the figures in Table 3.2 of FORM GSTR-3B.

Furnishing of information regarding ITC availed, reversal thereof and ineligible ITC in Table 4 of GSTR-3B

The major impact of this circular is made on the availment of ITC. In this article an attempt is made to understand as to how the ITC claimed to be disclosed in GSTR-3B

a. Total ITC (eligible as well as ineligible) is being auto-populated from statement in FORM GSTR-2B in different fields of Table 4A of FORM GSTR-3B (except for the ineligible ITC on account of limitation of time period as delineated in sub-section (4) of section 16 of the CGST Act or where the recipient of an intra-State supply is located in a different State / UT than that of place of supply).

b. Registered person will report reversal of ITC, which are absolute in nature and are not reclaimable, such as on account of rule 38 (reversal of credit by a banking company or a financial institution),rule 42 (reversal on input and input services on account of supply of exempted goods or services), rule 43 (reversal on capital goods on account of supply of exempted goods or services)of the CGST Rules and for reporting ineligible ITC under section 17(5) of the CGST Act in Table 4 (B) (1).

Mandatory information to be furnished while filing GSTR-1 & GSTR-3B

c. Registered person will report reversal of ITC, which are not permanent in nature and can be reclaimed in future subject to fulfilment of specific conditions, such as on account of rule 37 of CGST Rules (non-payment of consideration to supplier within 180 days), section16(2)(b) and section 16(2)(c)of the CGST Actin Table 4 (B)

d. Such ITC may be reclaimed in Table 4(A)(5) on fulfilment of necessary conditions.

e. Table 4(B)(2) may also be used by registered person for reversal of any ITC availed in Table 4(A) in previous tax periods because of some inadvertent mistake.

f. Therefore, the net ITC Available will be calculated in Table 4 (C) which is as per the formula (4A -[4B (1) + 4B (2)]) and same will be credited to the ECL of the registered person.

g. As the details of ineligible ITC under section 17(5) are being provided in Table 4(B), no further details of such ineligible ITC will be required to be provided in Table 4(D)(1).

h. ITC not available, on account of limitation of time period as delineated in sub-section (4) of section 16 of the CGST Act or where the recipient of an intra-State supply is located in a different State/UT than that of place of supply, may be reported by the registered person in Table 4D(2). Such details are available in Table 4 of FORM GSTR-2B.

The summary of the above disclosure is made as under

4. Eligible ITC
Details Integrated Tax Central Tax State/UT Tax Cess
(A) ITC Available (whether in full or part)
(1) Import of goods The said details are auto populated from GSTR-3B except for the ineligible ITC on account of limitation of time period as delineated in sub-section (4) of section 16 of the CGST Act or where the recipient of an intra-State supply is located in a different State / UT than that of place of  (+) ITC reclaimed
(2) Import of services
(3) Inward supplies liable to reverse charge (other than 1 & 2 above)
(4) Inward supplies from ISD
(5) All other ITC
(B) ITC Reversed
(1) As per rules 42 & 43 of CGST Rules Report reversal of ITC, which are absolute in nature and are not  reclaimable
(2) Others Report reversal of ITC, which  are  not  permanent  in  nature and can be reclaimed in future
a. Rule 37 (non-payment of  consideration to  supplier within 180 days)
b. Section 16(2)(b) – Not received goods or services.  
c. Section 16(2)(c) – Tax has not been paid. d. for  reversal of any ITC availed in Table 4(A) in previous tax periods because of some inadvertent mistakee. Ineligible ITC as per Section 17(5)
(C) Net ITC Available (A) – (B) The said amount will be credited to the ECL
(D) Ineligible ITC
(1) As per section 17(5) No amount has to be reported here as we have reversed the same in table 4(B)(2)
(2) Others ITC not available, on account of limitation of time period as delineated in sub-section (4) of section 16 of the CGST Act or where the  recipient of an intra-State supply is located in a different State / UT than that of place of  supply, may  be  reported  by  the  registered  person  in  Table  4D(2).  Such  details  are available in Table 4 of FORM GSTR-2B

Now filing of GSTR-3B is not at all an easy job as 1st we have correct report the taxes to be paid under reverse charge mechanism then the bifurcation of the supplies made state wise in the GSTR-3B to the unregistered persons and then the ITC portion. It is advised to follow the above steps to avoid litigation in future.

CA Ajay Kumar Mundada – ajay@mundadaandco.com

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One Comment

  1. Anil says:

    GST Input is auto populated, & some apart of GST INPUT ,where we are not eligible to take credit of input, that amount if we want to show, then where we have to show in GSTR 3B

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