GSTN Advisory on Last Opportunity for Reporting ITC Reversal Opening Balance

The Goods and Services Tax Network (GSTN) has notified the new facility of the Re-opening of Reporting ITC Reversal Opening Balance.

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 availment and reversal of ITC along with reporting of re-claimed and ineligible ITC.

As a result, the re-claimable ITC previously reversed in Table 4(B)2 may be claimed in Table 4(A)5 after meeting the necessary conditions, and such reclaimed ITC must also be reported in Table 4D(1).

To help taxpayers report ITC reversals and reclaims correctly and accurately, as well as to avoid clerical errors, a new ledger called Electronic Credit Reversal and Re-claimed Statement was introduced on the GST portal beginning with the August 2023 return period for monthly taxpayers and the July-September 2023 quarter for quarterly taxpayers.

The taxpayers were also given an opportunity to report their cumulative ITC reversal as an opening balance in the newly introduced Electronic Credit Reversal and Re-claimed Statement.

Extension of Due Dates for Reporting Opening Balance

Taxpayers now have one final opportunity to report their cumulative ITC reversal (ITC that has been reversed but not yet reclaimed) as the opening balance for the “Electronic Credit Reversal and Re-claimed Statement,” if any, before hard locking the reversal and reclaim ledger.

Please note the important dates to report the opening balance are mentioned below.

(i) The functionality to report the opening balance will be available from 15th September 2024 to 31st October 2024.

(ii) The amendments in the declared opening balance will be available till 30th November 2024.

(iii) Taxpayers having monthly filing frequency are required to report their opening balance considering the ITC reversal done till the return period of July 2023 only. As, after this period balance is already available in the ledger.

(iv) 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 only. As, after this period balance is already available in the ledger.

It should be noted that the system will soon no longer allow taxpayers to reclaim ITC in excess of the amount reversed before, and taxpayers will be unable to reclaim excess ITC when compared to the balance available in their Electronic Credit Reversal and Re-claimed Statement. As a result, it is advised to take use of this extended period to ensure that all necessary information is appropriately submitted.

For Advisory on Electronic Credit Reversal and Re-claimed Statement – Click Here