GSTN to Notify ITC Reversal for GSTR-3B Non-Filing by Suppliers - Act by 30th Nov

CA Umesh Sharma , Last updated: 21 November 2023  

Arjuna (Fictional Character): Krishna, it is been heard that the taxpayers are now required to reverse ITC for defaults or non-compliance by their suppliers, please clear the air around it.

Krishna (Fictional Character): Arjuna, the department has issued a press-release on 14th November 2023 requiring the taxpayers to reverse ITC claimed by them on account of GSTR 3B not filed by their suppliers as mentioned in Rule 37(A) of CGST Act.

Arjuna (Fictional Character): Krishna, Please explain the latest press-release & Rule 37(A).

Krishna (Fictional Character): Arjuna, to explain the press release & Rule 37(A) in simple terms, if you're a taxpayer who have claimed ITC for invoices and debit notes which were reported by your suppliers in their GSTR 1/IFF returns, but your suppliers haven't filed their GSTR 3B returns related to those transactions by September 30th after the end of the financial year when you claimed the credit, you are required to reverse that credit in your GSTR 3B return before November 30, 2023.

GSTN to Notify ITC Reversal for GSTR-3B Non-Filing by Suppliers - Act by 30th Nov

In order to assist the taxpayers in determining such amount for reversal of ITC under Rule 37(A) the department have issued communications to taxpayers of such amount which are system computed by the taxpayers.

The Taxpayers have been advised to reverse such ITC specifically in Table 4(B)(2) of their GSTR 3B returns, which ought to be filed before 30th November 2023.

Although as per the press release the said amount to be reversed will be communicated to taxpayers, taxpayers themselves can check such amount by downloading monthly GSTR 2A report wherein there is specific column for GSTR 3B filed status by suppliers.

Arjuna (Fictional Character): Krishna, what may happen if the taxpayers fails to reverse such ITC under Rule 37(A) before 30th November 2023?

Krishna (Fictional Character): Arjuna, if the taxpayer fails to reverse ITC in his GSTR 3B return before 30th November 2023, he may receive notice from department under Parameter 72, which deals with In-eligible claim of ITC by taxpayers from GSTR 3B non-filers.

Arjuna (Fictional Character): What other important things does the taxpayer shall keep in his mind before for filing his GSTR 3B return before 30th November 2023?


Krishna (Fictional Character): The taxpayers shall keep the following points in their mind before filing their GSTR 3B return this month:

  • Availment of ITC: 30th November 2023 is last date for availment of ITC on Invoices & Debit Notes issued by their suppliers during the Financial Year 2022-23. Such ITC if not claimed before 30th November 2023 shall stand lapsed and hence cannot be claimed by taxpayer thereafter.
  • Reversal under Rule 37: The taxpayers shall also ensure that all payments to supplier for the F.Y. 2022-23 has been made within 180 days from the date of invoice and if such payment have not been made the ITC in respect of such invoices shall be reversed by them in their GSTR 3B returns as per Rule 37.

Arjuna (Fictional Character): Krishna, what should one learn from this?


Krishna (Fictional Character): Arjuna, the latest press-release by the department is a step towards safeguarding the interest of the department, however it surely appears to be a little harsh on taxpayers as it punishes the taxpayers for defaults by the supplier. It again highlights that the department wants the taxpayer to not only ensure tax compliance by themselves, but also by their suppliers. The taxpayers should take note of this latest press release and reverse such ITC in their GSTR 3B returns and also take other important effects of F.Y. 2022-23 in their return before 30th November 2023 in order to avoid legal consequences.

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CA Umesh Sharma
Category GST   Report

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