CBIC Clarifies on Reporting Proper Information and ITC Reversal in GST Returns

The Central Board of Indirect taxes and Customs (CBIC) has issued a circular relating to the mandatory furnishing of proper data on inter-state supplies and reversal of Input Tax Credit (ITC) in Goods and Service Tax (GST) returns.

The circular says that it is advised to report correct information by the registered person in GSTR-3B and GSTR-1. This move ensures correct account and accurate funds settlement between the Central and state governments.

Coming to GSTR-3B, in table 3.2, the taxpayer has to report information related to inter-state supplies made to composition taxpayers, unregistered persons, and UIN holders. However, most taxpayers do not report saying they have already included them in table 3.1 of GSTR-3B.

Hence, the CBIC clarified that table 3.2 must be filled (place of supply-wise), even though they have been reported in table 3.1. The GST portal is auto-populating table 3.2 of GSTR-3B based on the details submitted in their GSTR-1 to ease the process. It is further advised that any amendment made in Table 9, 10, or 11 by the taxpayer shall be given effect in table 3.2 of GSTR-3B.

Also, it is to be noted that table 4(A) of GSTR-3B is getting auto-populated from GSTR-2B. After that, the taxpayer has to reverse the ITC on account of CGST Rules 42 and 43 or for any other reasons in table 4(B) GSTR-3B. Then the Net ITC available as per table 4(C) will be credited to Electronic Credit Ledger (ECL).

Hence, it is important that any reversal of ITC should not be part of table 4(C) and should not get credited into the ECL. However, CBIC observed that taxpayers followed different practices in reversing the ITC. So, it is clarified that all types of ITC reversal shall be made under Table 4(B) and not Table 4(D) of GSTR-3B.

For any clarifications/feedback on the topic, please contact the writer at dvsr.anjaneyulu@clear.in