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NEGATIVE ITC IN 3B

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mahipal m. chande

20 Points Posted on 05 November 2022

In GSTR 3B of a particular month there is no outward supply and hence tax payable on outward supply is nil.

But the ITC of that month is negative due to purchase returns and amendments made by suppliers.

Now question is that how to deal this situation in GSTR 3B?

Should I add negative balance of ITC in outward liability of current month or reduce the ITC of subsequent month to the extent of negative balance of current month?

Replies (2)

Quick Summary

This discussion addresses how to handle negative Input Tax Credit (ITC) in GSTR 3B when there are no outward supplies but ITC exceeds the tax payable due to purchase returns or supplier amendments. The advice given is not to add the negative ITC balance to the current month's outward liability. Instead, the system automatically handles this during the set-off process, treating the negative ITC as tax payable which can be utilised against existing GST credit, preventing double payment.

Ana Lili

20 Points Posted on 08 November 2022

This is really a difficult question 1v1 Battle

CA Kushwanth AVSR

CA in Practice CMA by Qualification

20 Points Posted on 08 November 2022

No need to add the negative net amount of ITC claimed to outward liability. As during the set off process, the system will treat the negative ITC amount as tax payable and accordingly if you have GST credit, you can utilise that. It is automated process and no need to add it to output tax liability as it will double the amount payable. You can verify that once in the set off page.