GSTN issues important advisory on ITC reversal on account of Rule 37A

According to Rule 37A of the CGST Rules, 2017, taxpayers must reverse the input tax credit (ITC) they received on such an invoice or debit note. Their supplier has provided details of the ITC on the invoice or debit note in their GSTR-1/IFF, but their supplier has not provided the return in FORM GSTR-3B for the relevant period until the 30th day of September that follows the end of the financial year in which the ITC was received on the invoice or debit note.

As part of this legal requirement, such taxpayers must reverse the aforementioned amount of ITC and make a return in FORM GSTR-3B by November 30 at the latest, following the conclusion of such financial year.

For the fiscal year 2022–2023, the amount of ITC that must be reversed due to Rule 37A of the CGST Rules has been calculated from the system and sent to the relevant recipient in order to assist the taxpayers. The taxpayer’s registered email address has received the email correspondence to this effect.

It is recommended that taxpayers take note of this and make sure that any ITC they may have received is reversed in accordance with rule 37A of the CGST Rules by November 30, 2023, in Table 4(B)(2) of GSTR-3B when filing the relevant GSTR-3B.