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TMI BlogMandatory furnishing of correct and proper information of inter-State supplies and amount of ineligible/blocked Input Tax Credit and reversal thereof in return in FORM GSTR-3B and statement in FORM GSTR-1X X X X Extracts X X X X X X X X Extracts X X X X ..... ng pari materia circular is issued :- The process of return filing has been simplified over a period of time. With effect from December 2020, FORM GSTR-3B is getting auto generated on the portal by way of auto-population of input tax credit (ITC) from FORM GSTR-2B (auto-generated inward supply statement) and auto-population of liabilities from FORM GSTR-1 (Outward supply statement), with an editing facility to the registered person. However, it has been observed that there still are some infirmities in information being furnished by the registered person in relation to inter-State supplies effected to unregistered person, registered person paying tax under section 10 of the Tamil Nadu Goods and Services Tax Act, 2017 (composition taxable persons) and UIN holders. Also, there appears to be lack of clarity regarding reporting of information about reversal of Input Tax Credit (hereinafter referred to as the ITC ) as well as ineligible ITC in Table 4 of FORM GSTR-3B. 2. It is desirable that correct reporting of information is done by the registered person in FORM GSTR-3B and FORM GSTR-1 so as to ensure correct accountal and accurate settlement of funds between the Central and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... law. (iii) shall update their customer database properly with correct State name and ensure that correct PoS is declared in the tax invoice and in Table 3.2 of FORM GSTR-3B while filing their return, so that tax reaches the Consumption State as per the principles of destination-based taxation system. 3.4 It is further advised that any amendment carried out in Table 9 or Table 10 of FORM GSTR-1 or any entry in Table 11 of FORM GSTR-1 relating to such supplies should also be given effect to while reporting the figures in Table 3.2 of FORM GSTR-3B. 4. Furnishing of information regarding ITC availed, reversal thereof and ineligible ITC in Table 4 of GSTR-3B 4.1 Table 4(A) of the FORM GSTR-3B is getting auto-populated from various entries of FORM GSTR-2B. However, various reversals of ITC on account of rule 42 and 43 of the TNGST Rules or for any other reasons are required to be made by the registered person, on his own ascertainment, in Table 4(B) of the said FORM. It has been observed that different practices are being followed to report ineligible ITC as well as various reversals of ITC in FORM GSTR-3B. 4.2 It may be noted that the amount of Net ITC Available as per T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch as on account of rule 38 (reversal of credit by a banking company or a financial institution), rule 42 (reversal on input and input services on account of supply of exempted goods or services), rule 43 (reversal on capital goods on account of supply of exempted goods or services) of the TN GST Rules and for reporting ineligible ITC under section 17(5) of the TNGST Act in Table 4 (B) (1). C. Registered person will report reversal of ITC, which are not permanent in nature and can be reclaimed in future subject to fulfilment of specific conditions, such as on account of rule 37 of TNGST Rules (non-payment of consideration to supplier within 180 days), section 16(2)(b) and section 16(2)(c) of the TNGST Act in Table 4 (B) (2). Such ITC may be reclaimed in Table 4(A)(5) on fulfilment of necessary conditions. Further, all such reclaimed ITC shall also be shown in Table Table 4 (B) (2) may also be used by registered person for reversal of any ITC availed in Table 4(A) in previous tax periods because of some inadvertent mistake. D. Therefore, the net ITC Available will be calculated in Table 4 (C) which is as per the formula (4A - [4B (1) + 4B (2)]) and same will be credited to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 50,000 Auto-populated in Table 4(A)(3) 4 ITC on Inward Supplies from ISD 50,000 - - 50,000 Auto-populated in Table 4(A)(4) 5 ITC on other inward supplies 2,00,000 1,50,000 1,50,000 5,00,000 Auto-populated in Table 4(A)(5) 6 Total 4,00,000 1,75,000 1,75,000 7,50,000 Other relevant facts: Note 1: Of the other inward supplies mentioned in row (5), M/s ABC has received goods on which ITC is barred under section 17(5) of the CGST Act having integrated tax of Rs. 50,000/- Note 2 : In terms of rule 42 and 43 of the CGST Rules, M/s ABC is required to reverse ITC of Rs. 75,500/- integrated tax, Rs. 52,000/- central tax and Rs. 52,000/- state tax. Note 3: M/s ABC had not received the supply during April, 2022 in respect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under rule 42 and 43 [Note 2] 3. Ineligible ITC of Integrated tax of Rs. 50,000/- under section 17(5) [Note 1] 2. Others 10,000 500 500 1. Refer para 4.3 (C) of circular 2. Reversal of integrated tax of Rs. 10,000/-, where supply is not received [Note 3] 3. Reversal of ITC of Rs 500/- central tax and Rs 500/- state tax on account of Rule 37 [Note 4] (C) Net ITC Available (A)-(B) 2,64,500 122500 122500 C=A1+A2+A3+A4+A5-B1-B2 (D) Ineligible ITC 1. As per section 17(5) - - - 1. Refer para 4.3 (E) of circular 2. Reversals under section 17(5) are not required to be shown in this row. The same are to be shown under 4(B)(1) 2. Others 10,000 10,000 1. Refer para 4.3(F) of circular 2. Ineligib ..... X X X X Extracts X X X X X X X X Extracts X X X X
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