New Tab: ITC Reversal & Reclaim Applicable from August 2023 GST Returns

Electronic Credit Reversal and Reclaimed statement

This statement relates to the notified changes made in the GSTR 3B returns to enable taxpayers in reporting correct information regarding ITC availed, ITC reversal, ITC re-claimed and ineligible ITC.

Pertains to which notification: –

Vide Notification No. 14/2022 – Central Tax dated 05th July, 2022 (read with circular 170/02/2022-GST, Dated 6th July,2022).

As per the mentioned notification the reclaimable ITC earlier reversed in Table4(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)

Purpose:-

To Track the ITC reversed in GSTR 3B under Table 4(B)(2) are correctly reclaimed in Table 4A(5) and reported under Table 4D (1) starting from August 2023 return period.

Also to 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.

What has to be reported in Electronic Credit and Re-claimed Statement?

The Cumulative ITC Reversed not reclaimed till now in any GSTR 3B returns has to be mentioned as Opening Balance for “Electronic Credit Reversal and Re-claimed Statement” under the respective Tax headings.

The Taxpayers are only permitted  to manually enter the opening balance of ITC Reversal pending to be yet reclaimed

Proper working must be maintained for the amount reported as opening balance.

The navigation to report ITC reversal balance:-

Login – Report ITC Reversal Opening Balance will appear on the Dashboard

 or

Under Services >> Ledger >> Electronic Credit Reversal and Re-claimed Statement >> Report ITC Reversal Opening Balance

Implication on which GSTR 3B Returns?

For Monthly taxpayers, pertains to August 2023.

For Quarterly Taxpayers the specified return period corresponds to Q2 of the financial year 2023-24, encompassing the months of July-September 2023

Once opening cumulative ITC Reversal balance pending for reclaiming is reported then the amounts mentioned in Table 4B (2) and Table 4D (1) will be auto populated in the  Electronic Credit and Re-claimed Statement and closing balance shall be automatically calculated.

After which in the following GSTR 3B Returns ITC Reclaim reporting under Table 4D(2) cannot exceed the closing balance as reflected in the  Electronic Credit and Re-claimed Statement.

Due date for reporting Opening Balance under Electronic Credit and Re-claimed Statement:-

30^TH November 2023 is the last date for reporting the opening balance of reversed ITC not reclaimed till now

Taxpayers having monthly filing frequency are required to report their opening balance considering the ITC reversal done till the return period of July 2023 not yet reclaimed

 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 not yet reclaimed

After 30^th November, portal will auto populate the amount as NIL and then while re-claiming prior period reversed ITC, it will show a Warning trigger of No opening balance available for reclaiming credit.

Can it be amended and last date?

If  any  mistakes or inaccuracies occur while reporting the opening Cumulative ITC Reversal balance then opportunity of amendment shall be provided upto maximum of 3 times.

The last date to amend the opening balance entered in Electronic Credit and Re-claimed Statement is 31^st December 2023.

After 31^st December 2023 no amendments shall be allowed

After 31st December 2023,the balance will be locked and it shall be sent to  jurisdictional officers for review

Validation Mechanism

After reporting of accumulated ITC Reversal balance, the portal will maintain a record of reversal and re-claimed amounts on a return period basis in statement as per the GSTR 3B Returns filed.

Hence 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) then a warning message shall be trigged to ensure accurate reporting but the taxpayers will still have the option to proceed with filing

Advisable not to reclaim ITC exceeding the closing balance of “Electronic Credit Reversal and Re-claimed Statement

Commencement of Warning messages: –

Monthly taxpayers- for the August 2023 return period.

Quarterly taxpayers-from the filing period covering July to Sept 2023.

Reference: GST Advisory on issued related to Electronic Credit Reversal and Re-claimed statement.

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