The GST Council has proposed several changes to correct errors and reduce mismatches in tax liability and Input Tax Credit (ITC) in GSTR-3B returns from April 2027 onwards.
The key changes are:
- GSTR-1, GSTR-1A and IFF: Improvements will help taxpayers reconcile sales details with the tax liability reported in the return in FORM GSTR-3B.
- New Reverse Charge Statement under Rule 86D: A new electronic statement will provide facility such as “Electronic Statement of tax paid on Reverse charge basis and input tax credit claimed” on the portal, to help the taxpayers in correct reporting of tax liability and ITC on supplies liable to RCM in returns.
- Correction of Tax Liability under Rule 61: Mechanism of correct reporting and correction/rectification of liability in the return, so that liability in the return in FORM GSTR-3B aligns with the details of liability furnished in FORM GSTR-1/1A/IFF.
- Changes in Form GST DRC-03: Taxpayers will need to provide details of the invoice against which a payment has been made.
- Invoice Management System (IMS): Recipients will be able to accept and reject for the purpose of generation of statement of ITC in FORM GSTR-2B, subject to certain conditions, including the period for which a credit note can be kept pending on IMS.
- Electronic Credit Reversal and Reclaim Statement under Rule 86C: This facility will help taxpayers correctly track and report ITC that has been reversed and later reclaimed.
- Correction of ITC under Rule 61: A mechanism will help correct ITC reporting in GSTR-3B to align the claimed credit with the details available in GSTR-2B.
- Clarification on ITC reporting: A circular will explain how to correctly report ITC and its reversals in GSTR-3B, considering IMS and the related electronic statements.
The proposed mechanism will first be shared publicly for feedback from stakeholders. Necessary changes may be made based on the suggestions received before implementation.
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