CBIC issues clarification on furnishing of information regarding inter-State supplies and amount of ineligible/blocked Input Tax Credit in FORM GSTR-3B
Central Board of Indirect Taxes and Customs (CBIC) has issued GST Circular No. 170_02_2022 dated 6th July, 2022 to clarify about mandatory furnishing of information regarding inter-State supplies made to unregistered persons and furnishing of information regarding Input Tax Credit (ITC) availed, reversal thereof and ineligible ITC in GSTR-3B.
Key points of Circular are:
A. Furnishing of information regarding inter-State supplies made to unregistered persons, composition taxable persons and UIN holders in Table 3.2 of Form GSTR-3B:
1. It has been clarified that, information in Table 3.2 of FORM GSTR-3B is required to be furnished, place of supply-wise and information in the said table is being auto-populated on the portal based on the details furnished in FORM GSTR-1.
2. Further it is clarified that the registered persons making inter-State supplies–
(i) to unregistered persons, shall also report the details of such supplies, place of supply-wise, in Table 3.2 of FORM GSTR-3B and Table 7B or Table 5 or Table 9/10 of FORM GSTR-1,as the case may be;
(ii) to registered persons paying tax under composition scheme and to UIN holders, shall also report the details of such supplies, place of supply-wise, in Table 3.2 of FORM GSTR-3B and Table 4A or 4C or 9 of FORM GSTR-1,as the case may be.
3. It has also been clarified that the customer database should be properly updated by the registered persons making inter-state supplies with correct State name and correct place of supply is declared in the tax invoice and in Table 3.2 of FORM GSTR-3B while filing their return.
4. It is further clarified that in case of 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.
B. Furnishing of information regarding ITC availed, reversal thereof and ineligible ITC in Table 4 of GSTR-3B:
Table 4(A) of 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 CGST 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 and the Net ITC available as per Table 4(C) of FORM GSTR-3B gets credited into the electronic credit ledger (ECL) of the registered person. Therefore, it is important that any reversal of ITC or any ITC which is ineligible under any provision of the CGST Act should not be part of Net ITC Available in Table 4(C) and accordingly should not get credited into the ECL of the registered person. In light of the above, the procedure to be followed by registered person is being detailed hereunder for correct reporting of information in the return:
1. Total ITC (eligible as well as ineligible) is being auto-populated from statement in FORM GSTR-2B in different fields of Table 4A of FORM GSTR-3B (except for the ineligible ITC on account of limitation of time period as delineated in sub-section (4) of section 16 of the CGST Act or where the recipient of an intra-State supply is located in a different State / UT than that of place of supply).
2. In Table 4 (B) (1) of FORM GSTR-3B, registered person will report reversal of ITC, which are absolute in nature and are not reclaimable, such 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 CGST Rules and for reporting ineligible ITC under section 17(5) of the CGST Act.
3. In Table 4(B)(2) of FORM GSTR-3B, 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 CGST Rules (non-payment of consideration to supplier within 180 days), section16 (2)(b) and section 16 (2)(c) of the CGST Act. Such ITC may be reclaimed in Table 4(A)(5) on fulfilment of necessary conditions. 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.
4. 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 the ECL of the registered person.
5. As the details of ineligible ITC under section 17(5) are being provided in Table 4(B), no further details of such ineligible ITC will be required to be provided in Table 4(D)(1).
6. ITC not available, on account of limitation of time period as delineated in sub-section (4) of section 16 of the CGST Act or where the recipient of an intra-State supply is located in a different State / UT than that of place of supply, may be reported by the registered person in Table 4D(2). Such details are available in Table 4 of FORM GSTR-2B.
7. Accordingly, it is clarified that the reversal of ITC of ineligible credit under section 17(5) or any other provisions of the CGST Act and rules thereunder is required to be made under Table 4(B) and not under Table 4(D) of FORM GSTR-3B.
For further details and illustration on manner of reversals refer to the attached Circular.
