Hi Everyone,
Looking for guidance/opinions from fellow practitioners regarding a specific GSTR-3B handling scenario for a client providing guest house accommodation services taxable at **5% GST without ITC** (under Notification No. 11/2017-Central Tax (Rate)).
### **Context & Past Action Taken:**
1. **Initial Mistake:** In Month 1 (first return), the entire inward ITC auto-populated in GSTR-3B Table 4(A)(5) from GSTR-2B was availed without manual reversal in Table 4(B)(1).
2. **Current Ledger Status:** The wrongly availed ITC was **never utilized** to set off any tax liability; the Electronic Credit Ledger balance remained intact.
3. **Rectification:** To clean up the ledger, we filed **Form GST DRC-03** under *Voluntary Payment (Wrong ITC Availed)* on the same day and debited the amount directly from the **Electronic Credit Ledger**.
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### **Queries for the Forum:**
1. **DRC-03 vs GSTR-3B Table 4(B)(1) Adjustment:**
Since the ITC was unutilized, is DRC-03 (Paid via Credit Ledger) the cleanest approach, or would you recommend making a cumulative reversal in Table 4(B)(1) of the subsequent month’s GSTR-3B despite portal warnings of negative net ITC?
2. **Standard SOP for Future Filings:**
As per CBIC Circular No. 170/02/2022-GST:
* Is accepting vendor invoices in IMS and letting 100% of GSTR-2B auto-populate into Table 4(A)(5), followed by an exact **100% permanent reversal in Table 4(B)(1)**, the standard monthly workflow you follow for 5% non-ITC clients?
3. **Risk of Automated Scrutiny (ASMT-10):**
Has anyone faced automated scrutiny notices for reversing 100% of GSTR-2B credit under Table 4(B)(1) every month, and does presenting Circular 170 satisfy the GST officer in practice?
Looking forward to your expert insights. Thanks in advance!
CAclubindia
