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ITC reversal must be done during cancellation ?

ITC / Input 249 views 1 replies

10interesting facts

4 Points Joined May 2023

Like we have a credit balance of ITC of almost like 1 lakh rupees and out gst has been cancelled during mar 23 , now in plight of Amnesty scheme , We are in thought of filing final return yet, do we need to reverse the ITC is the question

Replies (1)

Asha Kanta Sharma

Manager - Finance & Accounts

58323 Points Joined June 2010

Hey! About ITC reversal when your GST registration is cancelled — here’s the quick scoop:

ITC Reversal on Cancellation:

When GST registration is cancelled, any unutilized ITC balance in your electronic credit ledger must be reversed.
This is because you cannot carry forward or use ITC after cancellation.

In your case (ITC ~ ₹1 lakh, cancellation in Mar 2023):

You must reverse the ITC balance while filing your final GST return (GSTR-10).
The ITC reversal will be shown as an outward liability (added to your tax liability).
If you don’t reverse, the department can raise a demand later.

Amnesty scheme impact:

Amnesty scheme generally helps with late fees or penalties but does not waive off ITC reversal compliance.
So even if filing under amnesty, you need to reverse ITC balance properly.