How to reverse ITC while filing GSTR-10 for service provider?

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Megha Choudhary

Megha Choudhary (Querist)
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29 March 2022 How will you furnish reversal of itc for srvice provider in gstr 10

Aashok Kumar Sharma online

Aashok Kumar Sharma online

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09 July 2024 Reversal of Input Tax Credit (ITC) for a service provider when filing GSTR-10 (Final Return) involves a few key steps. GSTR-10 is a final return that needs to be filed by a taxpayer whose GST registration is canceled or surrendered. Here’s how you can furnish the reversal of ITC in GSTR-10:

### Steps to Furnish Reversal of ITC in GSTR-10:

1. **Login to GST Portal**:
- Go to the GST portal [GST Portal](https://www.gst.gov.in/).
- Login using your credentials (Username and Password).

2. **Navigate to GSTR-10**:
- Go to the "Services" tab.
- Select "Returns" and then "Final Return (GSTR-10)".

3. **Fill in Basic Details**:
- Fill in the relevant details in the initial sections, such as GSTIN, Legal Name, and Trade Name of the business.

4. **ITC Reversal Details**:
- In the GSTR-10 form, go to the table meant for the reversal of ITC. This is typically Table 8 - "Details of ITC Reversal / Payment of Tax".

5. **Provide Details of ITC Reversal**:
- You will need to provide the following details:
- **ITC Availed**: Enter the total amount of ITC availed that needs to be reversed.
- **Tax Paid**: Enter the tax amount paid for the ITC reversal.
- The breakdown will be required for different types of taxes (CGST, SGST, IGST, and Cess).

### Example of ITC Reversal Entry:

Assume you have to reverse an ITC of ₹10,000 (CGST ₹5,000 and SGST ₹5,000).

**Table 8 - ITC Reversal / Payment of Tax**:

- **Tax Amount (₹)**:
- **CGST**: 5000
- **SGST**: 5000
- **IGST**: 0 (if applicable)
- **Cess**: 0 (if applicable)

6. **Payment of Tax**:
- After entering the details, ensure that you have enough balance in your electronic cash ledger to pay the amount of ITC reversal.
- Make the payment using the available balance or deposit additional funds if necessary.

7. **Submit and File GSTR-10**:
- Review all the details entered.
- Click on "Preview" to verify the details before submission.
- Click on "Submit" to freeze the data.
- After submission, click on "File GSTR-10" using DSC (Digital Signature Certificate) or EVC (Electronic Verification Code).

8. **Acknowledgment**:
- Once the form is successfully filed, an acknowledgment reference number (ARN) will be generated. Save this for future reference.

### Important Considerations:

- **Accurate ITC Calculation**: Ensure that the ITC to be reversed is accurately calculated and matches with your books of accounts.

- **Documentation**: Keep all supporting documents and calculations for the reversal of ITC for audit and future reference.

- **Timely Filing**: File GSTR-10 within three months of the date of cancellation or the date of cancellation order, whichever is later.

By following these steps, you can correctly furnish the reversal of ITC for a service provider in GSTR-10. If you need further assistance, consulting a GST practitioner or a tax advisor is advisable to ensure compliance with all GST regulations.

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