The Goods and Services Tax Network (GSTN) has issued an important update regarding the introduction of negative values in Table 4 of GSTR-3B.
The changes have been made in accordance with the Notification No. 14/2022 – Central Tax dated July 05, 2022, which enabled taxpayers to accurately report their Input Tax Credit (ITC) availed, ITC reversal, and ineligible ITC in Table 4 of GSTR-3B.
With the Notification No. 14/2022 – Central Tax dated July 5, 2022, the government has majorly changed the following two aspects:
Firstly, mandatory reporting of reversals on account of ineligible ITC in Table 4(B) (1) which are permanent in nature and are not reclaimable, for e.g., blocked credits under section 17(5), reversals under Rule 42 & 43 on account of exempt supplies, etc. and
Secondly, reporting of ITC reversals not permanent in nature in Table 4(B)(2) and reclaiming the same in Table 4(A)(5) with specific reporting of the said information in Table 4(D)(1) as well [this is a new Table inserted now]. This will include ITC reversals on account of non-payment to vendors within 180 days, reversal of ITC appearing in GSTR 2B but not accounted in books, etc.
The net ITC must now be reported in Table 4(A), while any ITC reversal must be reported in Table 4(B). Previously, credit notes were auto-populated in Table 4B(2) as ITC reversal, but now their impact will be accounted for on a net off basis in Table 4(A) only.
The GST Portal has been updated accordingly, with these changes taking effect from the January 2023 tax period onwards. Taxpayers can now report negative values in Table 4(A) if the value of credit notes becomes higher than the sum of invoices and debit notes put together.
Additionally, negative values can also be entered in Table 4D(2) of GSTR-3B. Consequent updates and modifications have been made to the advisory, messages, instructions, and help-text in Form GSTR-2B without any structural changes in Form GSTR-2B summary or tables. The calculation logic of the Comparison Report has also been changed accordingly.
Taxpayers were also advised to carefully read the instructions/help-text in GSTR-2B and the system-generated GSTR-3B PDF before filing their GSTR-3B to ensure compliance with the updated guidelines.
The advisory released by the Goods and Services Tax Network (GSTN) regarding the same can now be accessed at https://www.gst.gov.in/newsandupdates/read/569.
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