Tracing the impact of Circular No. 170/02/2022 to GSTR-9 for FY 2022-23
The purpose this circular No.170/02/2022 was to clarify mandatory 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-1. The category of changes suggested are broadly in lines of :
- Changes relating to supplies through E-commerce operators
- Changes relating to reporting of inter-state supplies
- Changes relating to ITC
Over this blog, we attempt to trace the changes relating to ITC on to respective rows of GSTR 9 for FY 2022-23. Clarification as such on these lines not available elsewhere, so its to be understood as our personal view only for any wider consumption for application as such.
The effect of various changes made in GSTR 3B are explained below:
Credits that needs permanent reversals such as under Section 17 (5), rule 42 & 43 etc shall also be included in Table 4A. They have to be separately reversed under Table 4B (1). Earlier, blocked credit under Section 17 (5) would not form part of Table 4A and would be shown only in Table 4D (1). Now, even such blocked credits under Section 17 (5) shall be included in Table 4A and reversed through Table 4B (1). In other words, the practice of excluding blocked credit and claiming only eligible ITC in Table 4A can no longer be followed.
Similarly, the Banking companies and Financial Institutions, who opt to avail 50 % ITC under Rule 38, shall show the entire ITC in Table 4A and show the 50 % reversal in Table 4B (1).
In Table 4 B (2), all other temporary reversals, other than what is covered in 4B (1) have to be shown.
Table 4D has been amended. In Table 4D (1), the credits reclaimed in different situations have to be shown. For example, if payment to the supplier is not made within 180 days, the credit has to be reversed through Table 4B (2). As and when payments are made to the supplier, the reclaimed credit has to be shown in Table 4D (1). As this amount shown in Table 4D (1) would not automatically get credited in the Electronic Credit Ledger, such reclaimed credit has to be shown in Table 4A (5) also.
Effective 30th Nov 2023, the credits that are reversed temporarily in Table 4B(2) but pending reclaim are forming part of "opening balance of ITC reversal and reclaim ledger" newly introduced on GST portal.
As the FY 2022-23 saw a mixed way of declarations in Table 4 of GSTR 3B before or after the said circular read with Notification 14/2022 Central Tax dated 5th July 2022, the following scenarios could be used to trace the impact on GSTR 9 for FY 2022-23:
I - Temporary reversals and reclaim made within the same FY 2022-23
II - Temporary reversals made during the FY 2022-23 but reclaim made on or before Oct 2023 return filed up to 30th Nov 2023
III - Temporary reversals made during the FY 2022-23 but not reclaimed until Oct 2023 return
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