Re-opening of Reporting ITC Reversal Opening Balance
Sep 17th, 2024
- Vide Notification No. 14/2022 – Central Tax dated 05th July, 2022 (read with circular 170/02/2022-GST, Dated 6th July, 2022), the Government introduced certain changes in Table 4 of Form GSTR-3B regarding the availment & reversal of ITC along with reporting of re-claimed and ineligible ITC. Accordingly, the re-claimable ITC earlier reversed in Table 4(B)2 may be subsequently claimed in Table 4(A)5 on fulfilment of necessary conditions, and such reclaimed ITC also needs to be reported in Table 4D(1).
- To facilitate correct and accurate reporting of ITC reversal and reclaim and to avoid clerical mistakes, a new ledger, namely the Electronic Credit Reversal and Re-claimed Statement, was introduced on the GST portal starting from the August 2023 return period for monthly taxpayers and the July-September 2023 quarter for quarterly taxpayers. Taxpayers were also given an opportunity to report their cumulative ITC reversal as an opening balance in this newly introduced statement.
Extension of Due Dates for Reporting Opening Balance
- Taxpayers are now being provided with a final opportunity to report their cumulative ITC reversal (ITC that has been reversed earlier and not yet reclaimed) as an opening balance for the “Electronic Credit Reversal and Re-claimed Statement” before the system hard locks the reversal and reclaim ledger. Below are the important dates for reporting this opening balance:
- The functionality for reporting the opening balance will be available from 15th September 2024 to 31st October 2024.
- Amendments in declared opening balance will be available until 30th November 2024.
- Taxpayers with monthly filing frequency should report their opening balance based on the ITC reversal done up to the July 2023 return period, as balances after this period are already reflected in the ledger.
- Quarterly taxpayers should report their opening balance up to Q1 of FY 2023-24 based on ITC reversals made up to the April-June 2023 return period.
- It is important to note that, going forward, the system will not allow ITC reclaims exceeding the amount previously reversed, and taxpayers will be unable to reclaim more ITC than the available balance in their Electronic Credit Reversal and Re-claimed Statement. Therefore, taxpayers are encouraged to make use of this extended period to ensure all relevant information is reported accurately.
- For further details, please refer to the detailed advisory: Electronic Credit Reversal and Re-claimed Statement.
Thanks,
Team GSTN
The Government has notified changes in Table 4 of Form GSTR-3B to enable taxpayers to report correct information regarding ITC availed, ITC reversal, ITC re-claimed, and ineligible ITC through Notification No. 14/2022 – Central Tax dated 05th July 2022 (read with circular 170/02/2022-GST, dated 6th July 2022). The reclaimable ITC, earlier reversed in Table 4(B)2, may subsequently be claimed in Table 4(A)5, provided the necessary conditions are fulfilled. Such reclaimed ITC in Table 4(A)5 must also be explicitly reported in Table 4D(1).
Key Highlights:
- Introduction of the Electronic Credit and Re-claimed Statement
To facilitate accurate reporting of ITC reversal and reclaim, a new ledger, the Electronic Credit and Re-claimed Statement, has been introduced on the GST portal. This statement helps taxpayers track their ITC reversals reported in Table 4B(2) and the corresponding reclaims in Table 4D(1) and Table 4A(5) for each return period, starting from August 2023 for monthly taxpayers. - Alignment of ITC Reclaims with Reversed ITC
This statement ensures that when ITC is reclaimed in GSTR-3B, the reclaimed amount is appropriately aligned with the reversed ITC. This improvement enhances the consistency and accuracy of ITC-related transactions. For monthly taxpayers, the relevant return period is August 2023, while for quarterly filers, it applies to Q2 of FY 2023-24 (July-September 2023). - Facility to Report Cumulative ITC Reversal as Opening Balance
Taxpayers can now report their cumulative ITC reversals (reversed but not reclaimed) as the opening balance for the “Electronic Credit Reversal and Re-claimed Statement.” The steps for reporting this opening balance are as follows:Navigation:
Login >> Report ITC Reversal Opening Balance
OR
Services >> Ledger >> Electronic Credit Reversal and Re-claimed Statement >> Report ITC Reversal Opening Balance- Monthly filers must report the opening balance considering ITC reversals made until the July 2023 return period.
- Quarterly filers must report the opening balance up to Q1 of FY 2023-24, considering ITC reversals until the April-June 2023 return period.
- Validation Mechanism for ITC Reclaims
The GST portal will maintain a record of reversals and reclaims on a return-period basis in the statement. A validation mechanism has been integrated into the GSTR-3B form to trigger a warning message if a taxpayer attempts to reclaim more ITC in Table 4D(1) than the available balance in the statement and current ITC reversals in Table 4B(2). While taxpayers will still be allowed to proceed with filing despite the warning, they are advised not to reclaim ITC exceeding the balance in the Electronic Credit Reversal and Re-claimed Statement. Pending reversals, if any, should be reported as the ITC reversal opening balance. - Implementation of Warning Message
For monthly taxpayers, the warning message will appear when filing GSTR-3B for the August 2023 return period. For quarterly taxpayers, this message will be triggered from the filing for the July-September 2023 return period.
Visit www.cagurujiclasses.com for practical courses
