GSTN has issued Advisory dated 31/08/2023, in relation to changes introduced by the Government, vide Central Tax Notification 14/2022 dated July 5, 2022 read with GST circular 170/02/2022 dated July 6, 2022, in Table 4 of Form GSTR-3B to enable taxpayers to correctly report information regarding ITC availed, ITC reversal, ITC re-claimed, and ineligible ITC.
A new ledger called the Electronic Credit and Re-claimed Statement is being introduced at the GST portal to facilitate accurate reporting and avoid clerical mistakes. This feature will be available from the August 2023 return period.
The navigation to report ITC reversal balance is as under:
i) Login >> Report ITC Reversal Opening Balance; or
ii) Services >> Ledger >> Electronic Credit Reversal and Re-claimed Statement >> Report ITC Reversal Opening Balance.
1. Statement of Electronic Credit and Reclaimed: This new statement aims to improve the consistency and accuracy of ITC reversal and re-claims related transactions. It will help the taxpayers track reversed ITC in Table 4B(2) and re-claimed ITC in Table 4D(1) and 4A(5) for each return period starting from:
i) August 2023 return period: For Monthly taxpayers; and
ii) Q2, FY 2023-24 (July-September 2023): For Quarterly taxpayers.
2. Opening Balance Reporting: Taxpayers have the facility to report their cumulative ITC reversal as an opening balance for the “Electronic Credit Reversal and Re-claimed Statement”. The deadline to declare the opening balance for ITC reversal is 30th November 2023.
i) For Monthly taxpayers: ITC reversal done till July 2023; and
ii) For Quarterly taxpayers: ITC reversal done till April-June 2023.
3. Amendment Opportunities: Taxpayers will be given three opportunities to correct any mistakes or inaccuracies in reporting their opening balance. These amendment options will be available until 31st December 2023.
4. Validation Mechanism: A validation mechanism has been incorporated into the GSTR-3B form, triggering a warning message if a taxpayer attempts to re-claim excess ITC in table 4D(1) than the available ITC reversal balance.
i) For Monthly taxpayers: Warning message starts from August 2023 return period; and
ii) For Quarterly taxpayers: Warning message starts from July-September 2023 filing period.
The newly introduced “Electronic Credit Reversal and Reclaimed Statement” feature in the GST portal is designed to avoid errors and improve accuracy in reporting ITC reversal and re-claims. Taxpayers need to report their opening balance and utilize the amendment opportunities provided for accurate compliance with the new guidelines.