During the tax periods from August 2023 to May 2026, credit notes uploaded by the suppliers were auto-populated in GSTR-2B and were inadvertently dealt with under Table 4(B)(2) of the respective GSTR-3B returns as a temporary reversal.
The above treatment was followed without appreciating the change in the reporting mechanism applicable with effect from 1 September 2022, whereby the impact of such supplier-uploaded credit notes was required to be appropriately considered while determining the net ITC under Table 4(A)(5) – All Other ITC. However, in the GSTR-3B returns, after giving effect to the supplier-uploaded credit notes, the resultant net ITC was carried forward to the Electronic Credit Ledger, which subsequently resulted in the amount of CGST ₹99,986 and SGST ₹99,986 being reflected in the Electronic Credit Reversal and Re-claimed Statement.
Electronic Credit Reversal and Re-claimed Statement
|
Particulars |
CGST (₹) |
SGST (₹) |
|
Balance reflected in Electronic Credit Reversal and Re-claimed Statement |
99,986 |
99,986 |
Pursuant to the applicable GSTN advisory, the balance of CGST ₹99,986 and SGST ₹99,986 was reported in the July 2026 GSTR-3B under Table 4(A)(5) – All Other ITC and Table 4(D)(1) – ITC reclaimed which was reversed earlier under Table 4(B)(2).
Consequently, CGST ₹99,986 and SGST ₹99,986 became available in the Electronic Credit Ledger. The exact amount of ₹99,986 each under CGST and SGST was retained unutilised in the Electronic Credit Ledger.
It was subsequently identified that the above balance had arisen due to the incorrect reporting treatment of the supplier-uploaded credit notes under Table 4(B)(2) and the consequent reflection in the Electronic Credit Reversal and Re-claimed Statement.
Since the July 2026 GSTR-3B cannot be revised, the correction is required to be made in the August 2026 GSTR-3B.
Expert Opinion Requested
Kindly advise how the above reporting error should be rectified in accordance with the applicable provisions of GST law and the prescribed GSTR-3B reporting mechanism.
For ease of consideration, the manner of correction requiring your opinion is set out below:
|
Option A – Adjustment against Eligible ITC |
Option B – Reversal under Table 4(B)(1) |
|
|
Proposed treatment |
Reduce CGST ₹99,986 and SGST ₹99,986 to that extent from the eligible ITC reported under Table 4(A)(5) – All Other ITC. Where there is insufficient or no eligible ITC for the month, kindly advise whether the corresponding amount may be reported as a negative figure. |
Report CGST ₹99,986 and SGST ₹99,986 as positive figures under Table 4(B)(1) as a voluntary reversal/correction, so that the correction is clearly identifiable for departmental and internal records. |
Kindly advise which of the above treatments, or any other treatment prescribed under GST law, is legally and procedurally appropriate for rectifying the error.
Since CGST ₹99,986 and SGST ₹99,986 have not been utilised in any manner, the proposed correction is purely corrective in nature, both for departmental records and for our own GST records.
We also request your opinion on whether the fact that the corresponding amount remained unutilised in the Electronic Credit Ledger throughout has any bearing on the applicability of interest or any other consequential liability.
Kindly also advise on the appropriate documentation and reconciliation to be maintained to substantiate the rectification in the event of any future departmental verification.
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