Taxpayers are now seeing reversals required under Rule 37A reflected in their September GSTR-2B, showing the Input Tax Credit (ITC) that must be reversed due to the non-filing of GSTR-3B by suppliers for FY 2023-24. The next step is to ensure vendors file their pending GSTR-3B returns, as failing to do so may lead to temporary ITC reversals.
Key Steps for Taxpayers
- Review GSTR-2B for September: ITC amounts subject to reversal due to vendor non-compliance with GSTR-3B filing are displayed.
- Follow up with Vendors: Prompt vendors to file their pending GSTR-3B for FY 2023-24 before you file your October GSTR-3B.
- ITC Reversal if Vendors Fail to File: If vendors do not file GSTR-3B by the time you file for October, the ITC shown in GSTR-2B must be temporarily reversed and disclosed in Table 4B(2) of your GSTR-3B.
- Reclaim ITC Upon Vendor Filing: Once suppliers file their GSTR-3B, the reversed ITC can be reclaimed.
ITC Reversal Calculation
The reversal amount under Rule 37A includes all invoices, excluding RCM invoices, debit notes, and their corresponding amendments, but excluding credit notes and amendments to credit notes for the period the supplier failed to file GSTR-3B.
Relevant Rule
- Rule 37A (inserted via Notification No. 12/2024 - Central Tax, dated 10.07.2024) mandates that if a supplier has not filed their GSTR-3B by September 30 following the end of the financial year, ITC must be reversed in the November GSTR-3B filing. If not, interest will accrue under Section 50.
- ITC can be re-availed once the supplier subsequently files their GSTR-3B.
Taxpayers must remain proactive in tracking their GSTR-2B and work with vendors to avoid ITC reversals.
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