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Reversal of ITC lying in Credit ledger when GST RC is cancelled

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M.Amin

Partner

89 Points Posted on 10 August 2022

Under section 65(6) Audit observation we have been called upon to reverse ITC lying in the credit ledger of our RC that was cancelled su moto in Nov 21. As we have no option to file GSTR3B after Nov 21, it is suggested by some that this can be done through DRC 3. Is this correct view . Will be obliged to get help here.

Replies (3)

Quick Summary

This discussion addresses how to reverse Input Tax Credit (ITC) lying in a GST credit ledger when a registration has been cancelled. The user was asked to reverse ITC after their registration was cancelled. It explores options like using Form DRC-03 for reversal, especially if GSTR-3B could not be filed post-cancellation. Guidance suggests filing an annual return or a final return depending on the reason for the remaining liability before making the payment.

CA Rashmi Gandhi

Chartered Accountant

44487 Points Posted on 10 August 2022

1. If ITC remained due to difference in liability declared under GSTR-3B then file annual return first and then pay liability through DRC-03.

2. If liability was in respect of input belongs to stock held by you on date of closing then file final return and then pay liability.