One of my client has taxable purchase but sale is nil rated. For this reason a huge amount is accumulated in gst credit ledger. It is a fake assets. Can I reverse it in GSTR 3B. What is the rule?
please suggest.
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INPUT TAX EXCESS IN CREDIT LEDGER
Replies (12)
Quick Summary
You can reverse by using form DRC 3 available in the portal
Yes you may to do so
Yes... If Taxpayers dealing Nil Rated or Exempted goods then ITC will reversible.
You can reverse such input tax which is showing in credit ledger also reverse coming returns related ITCs.
You can reverse such input tax which is showing in credit ledger also reverse coming returns related ITCs.
Which is better and right process for reverse DRC 3 or GSTR 3B ?
As per my view if it's exempted sales n nil rated then rule 42 n 43 coming to picture for reverse of itc better for reverse n report in return s
It is better to reverse the excess ITC Claimed at the time of filing subsequent GSTR-3B only
Madam ITC is excess because of nil rated sale and taxable puchase...it is not claim wrongly. But in this process a huge ITC is showing in credit ledger which is our assets bt in accounts we take all input as our purchase cost because of nil rated sale..so there is a mismatch in accounts and credit ledger. so is it require to reverse itc of credit ledger or not if yes what is the right process ? please tell me
Yes it is required to reverse the ITC in the returns to filed.
Then it is best to reverse it in next month GSTR 3B
YES, it is best to reverse
Thank u mam...and all of u for ur valuable suggestions.
If the sale is in relation to export of goods/services then credit on taxable purchases is eligible, and refund can be applied for the same.
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