Variance _ RCM on rent

Dear friends...

when we try to avail ITC on GST paid on rent by entering values in Table 4(A)(3) in GSTR-3B, it is shown as there is a variance in auto population highlighting in red colour. what to do? If we proceed, will it be another problem in future?

pls help on this issue...
Replies (4)
Quick Summary
This discussion addresses a common issue where a variance appears in red when claiming Input Tax Credit (ITC) on rent in GSTR-3B, specifically concerning Reverse Charge Mechanism (RCM) payments. The advice provided is to reconcile the ITC claimed with GSTR-2A and update Table 4(A)(3) accordingly. If the GST liability under RCM is correctly declared in Table 3.1(d) and the ITC is claimed in Table 4(A)(3), it's generally advised to ignore the red variance warning to avoid future complications like ITC reversal or penalties.

 The error you're encountering, where the system highlights a variance in auto-population in red, typically occurs due to a mismatch between the ITC claimed in Table 4(A)(3) and the corresponding details in the GSTR-2A. To resolve this issue:

 1. *Verify GSTR-2A*: Ensure that the rent paid and GST thereon are correctly reflected in the GSTR-2A.

2. *Reconcile ITC*: Reconcile the ITC claimed in Table 4(A)(3) with the GSTR-2A. Make adjustments as necessary. 

3. *Update Table 4(A)(3)*: Update the ITC values in Table 4(A)(3) to match the reconciled amounts. 

4. *Save and Submit GSTR-3B*: Save and submit the GSTR-3B return. 

Proceeding with the ITC claim despite the error may lead to potential issues in the future: - 

*ITC Reversal*: The GST authorities may reverse the ITC claimed, leading to additional tax liabilities and interest. -

 *Penalties and Interest*: Failure to accurately claim ITC may attract penalties and interest under the GST Act. -

 *Audit and Scrutiny*: Inaccurate ITC claims may lead to audit and scrutiny by the GST authorities, resulting in additional compliance burdens. To avoid these issues, ensure accurate and reconciled ITC claims in your GSTR-3B return.

Sir, then how will we claim ITC on rent paid on RCM basis?

If you are availing ITC in Table 4(3) of which decalred in Table 3.1(d), just ignore the error.  As you are making payment of GST liability under reverse charge you are eligible for availing input credit of the same. 

If you have shown the liability in Table 3.1 in d, column "Inward supplies liable to reverse charge"....then you can claim ITC of this in Table 3.4A in (3) Inward supplies liabke to reverse charge.

 

Ignore the red error.

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