Reversal and Reclaim issues
This query is : Resolved
07 July 2025
This query regarding one of my client’s situation where Input Tax Credit (ITC) was reversed every month in GSTR-3B Table 4(B)(2) (“Others”) during FY 2024-25, intended to be reclaimed in Table 4(D)(1) (“ITC Reclaimed which was reversed under Table 4(B)(2) in earlier tax periods”) in the subsequent month, but not included in Table 4(C) (“Net ITC available”) due to this reason ITC as per Books and ITC as per Credit ledger Not Matched, and even difference arise exact reverse and reclaim amount, Kindly provide a solution for this issues based on the Central Goods and Services Tax (CGST) Act, 2017, and CGST Rules, 2017.
12 August 2025
Maintain Separate Records:
Maintain a clear record of ITC reversed and ITC reclaimed with date-wise details for audit and reconciliation.
Reconcile Carefully:
The ITC reversal amount in 4(B)(2) and reclaim amount in 4(D)(1) should be matched month-wise in your reconciliation statement.
Since ITC reclaimed is not in 4(C), reconcile ITC available by considering reversal and reclaim separately.
Correct Reporting in GSTR-3B:
Always reverse ITC in 4(B)(2) for the month it needs to be reversed.
Reclaim ITC only when all conditions are satisfied in subsequent months and report under 4(D)(1).
Do not include reclaimed ITC in 4(C).
Books Adjustment:
Adjust your accounting entries to reflect reversal of ITC as expense or blocked credit, and reclaim as ITC income (or reversal of previous expense).
This ensures books and credit ledger can be aligned after proper reconciliation.
ITC Reclaim Should be Done Timely:
Reclaim should be done as soon as conditions are met to avoid prolonged mismatch.
Maintain a clear record of ITC reversed and ITC reclaimed with date-wise details for audit and reconciliation.
Reconcile Carefully:
The ITC reversal amount in 4(B)(2) and reclaim amount in 4(D)(1) should be matched month-wise in your reconciliation statement.
Since ITC reclaimed is not in 4(C), reconcile ITC available by considering reversal and reclaim separately.
Correct Reporting in GSTR-3B:
Always reverse ITC in 4(B)(2) for the month it needs to be reversed.
Reclaim ITC only when all conditions are satisfied in subsequent months and report under 4(D)(1).
Do not include reclaimed ITC in 4(C).
Books Adjustment:
Adjust your accounting entries to reflect reversal of ITC as expense or blocked credit, and reclaim as ITC income (or reversal of previous expense).
This ensures books and credit ledger can be aligned after proper reconciliation.
ITC Reclaim Should be Done Timely:
Reclaim should be done as soon as conditions are met to avoid prolonged mismatch.
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