Last day to freeze your balance in Reversal and Reclaim Ledger- Things not to miss

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 As per GSTN advisory dated 29th Dec 2023, today is the last day to to amend declared opening balance for ITC reversal. 


As per circular No.170/02/2022 para 4, 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 too. 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.

Don't miss to pay attention on the following aspects in this regard:

  1. If you have not followed this circular for filing GSTR 3B until now for FY 22-23 and FY 23-24, it will be the last opportunity to act upon in modifying the opening balance of this Reversal and Reclaim Ledger.
  2. FORM GST DRC-01C is enabled under rule 88D already started its monitoring task in GSTN, its an automatic notice expires in 7 days to respond failing which Show Cause Notice and demand order will be automatically triggered as well. This notice is intend to flush out the difference between your GSTR 2B & GSTR 3B ( Table 4A, 4B & 4D is considered). Had you not followed this circular procedure in claiming and reversing ITC in table 4 of GSTR 3B, you have to look for this notice every time you reclaim the ITC that was net-adjusted along with claim in Table 4A(5) of GSTR 3B. And you respond stating that you had failed to reversal under Table 4B(2) might not be tenable, leads to litigation.
  3. Every time you reclaim the credit, it should be part of this reversal and reclaim ledger, before you add this in 4A(5) and indicate the same in 4D(1) too, and this will reduce the balance from reclaim ledger as a result. Thus, without the balance in this ledger, the reclaim process wont work.


- LDR


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