ITC claimed in excess

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This discussion addresses how to rectify an excess Input Tax Credit (ITC) claim of Rs. 294,651.00 made in FY 2020-2021 compared to GSTR-2B. The recommended approach for the QRMP system in FY 2021-2022 is to reverse the excess ITC in the quarterly GSTR-3B. This can be done by showing the reduction in eligible ITC under Table 4.B.(2), rather than increasing outward tax liability. It's also advised to investigate missing invoices and consider using DRC-03 for genuine reversals.

DEBASISH BODHAK

DEBASISH BODHAK (Querist)

31 May 2021 For the FY 2020-2021 ITC claimed in GSTR-3B Rs.3733460.00 but as per GSTR-2B it should be Rs.3438809.00. So, we have claimed ITC in excess 294651.00.
Please suggest me in QRMP system FY 2021-2022, how we should adjust the excess ITC claimed last year.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

31 May 2021 Reverse the ITC in quarterly GSTR 3b of current year and pay taxes in the last month of the quarter for reversal with interest.

DEBASISH BODHAK

DEBASISH BODHAK (Querist)

31 May 2021 Thanks for your reply. Could you please tell me the details procedure of reversal in quarterly GSTR-3B Return. Actually I am confused about this. Opinion 1 - Increase the outward tax in 3.1 and pay the tax.
Opinion 2 - Show it in 4. B. (2) to decrease the ITC

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

31 May 2021 It's Opinion 2 - Show it in 4. B. (2) to decrease the ITC

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CA Altamush Zafar

CA Altamush Zafar (Expert)

31 May 2021 It will be better to first identify the missing invoices in GSTR-2B. It may so happen that the suppliers have filed their invoices in the next year.
If such reversal is genuine you can reverse it through DRC-03.

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