No More Auto ITC in GSTR-3B from 1st October 2025

Starting from 1st October 2025, taxpayers now have to capture input tax credit data manually to have them reflected in their GSTR 2B, as it will no longer be automatically populated in GSTR-3B.

Manual Input Tax Credit Management

Previously, GSTR-2B statement are auto-generate on the portal along with this ITC amount are also automatically populated in GSTR-3B before its filing due date.

Now to reflect these invoices in GSTR-2B, taxpayers are required to take actions (accept or reject invoices) within the Invoice Management System (IMS). Only after these actions GSTR-2B will be generated based on the accepted invoices. 

This amendment is made under Section 38, changing the phrase "auto-generated statement" to simply "a statement," indicating the shift from automatic to manual generation.

Changes in Credit Note on Supplier's Liability

Previously, when supplier issues a credit note they use to reduce their liability in GSTR-1 even if the recipient doesn’t reverse the related ITC.

Now, the supplier cannot just reduce their liability by issuing a credit note. The recipient must first reverse the ITC to that credit note.

In short:

Supplier’s liability reduction is now dependent on recipient’s ITC reversal.

These new rules were already decided in the 55th GST Council meeting -

• To amend section 38 of CGST Act, 2017 and rule 60 of CGST Rules, 2017 to provide a legal framework in respect of generation of FORM GSTR-2B based on the action taken by the taxpayers on the Invoice Management System (IMS).
• To amend section 34(2) of CGST Act, 2017, to specifically provide for requirement of reversal of input tax credit as is attributable to a credit note, by the recipient, to enable the reduction of output tax liability of the supplier.
• To insert a new rule 67B in CGST Rules, 2017, to prescribe the manner in which the output tax liability of the supplier shall be adjusted against the credit note issued by him.
• To amend section 39 (1) of CGST Act, 2017 and rule 61 of CGST Rules, 2017 to provide that FORM GSTR-3B of a tax period shall be allowed to be filed only after FORM GSTR-2B of the said tax period is made available on the portal

This change marks a significant shift in the GST return filing process, moving away from previous tax methods.