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Published on:
February 20, 2023
By
Paramita

Changes in Table 4 of GSTR 3B – Reporting of ITC Availment, Reversal & Ineligible ITC

The Goods and Services Tax (GST) is one of the most important tax reforms implemented in India in recent times. It is a comprehensive indirect tax that was introduced on July 1, 2017, to replace the previous complex tax structure. The GST is levied on the supply of goods and services, and it is a destination-based tax. One of the key components of the GST is the Input Tax Credit (ITC) system, which allows businesses to claim credit for the tax paid on their inputs.

The GST returns are filed by businesses on a monthly or quarterly basis, depending on their turnover. The GSTR 3B is a monthly return that is filed by businesses to report their summary of sales and purchases during the month, along with the amount of tax paid and the ITC claimed. The GSTR 3B has several tables that need to be filled out, and one of the most important tables is Table 4, which deals with the ITC availment, reversal, and ineligible ITC.

In this article, we will discuss the recent changes that have been made to Table 4 of the GSTR 3B and their implications for businesses.

Summary of Changes to Table 4 of GSTR 3B

The Central Board of Indirect Taxes and Customs (CBIC) has recently made some changes to Table 4 of the GSTR 3B relating to the reporting of ITC availment, reversal, and ineligible ITC. The changes are as follows:

  1. The ITC claimed on imports that are reported in Table 4A of the GSTR-3B will now be auto-populated in Table 4B of the GSTR-3B.
  2. The ITC claimed on inward supplies that are liable to reverse charge will now be reported in Table 4C of the GSTR-3B.
  3. The ITC claimed on inward supplies received from registered persons that are not liable to reverse charge will now be reported in Table 4D of the GSTR-3B.
  4. The ITC claimed on inward supplies received from unregistered persons will now be reported in Table 4E of the GSTR-3B.
  5. The ITC claimed on inward supplies received from composition dealers will now be reported in Table 4F of the GSTR-3B.
  6. The amount of ineligible ITC that has been reversed will now be reported in Table 4H of the GSTR-3B.

Category and Sub-Category

BusinessTaxation

Implications of the Changes to Table 4 of GSTR 3B

The changes that have been made to Table 4 of the GSTR 3B will have several implications for businesses. One of the main implications is that it will make it easier for businesses to claim ITC and report the same in their GST returns. The auto-population of ITC claimed on imports in Table 4B will reduce the burden on taxpayers and make the process more efficient.

The reporting of ITC claimed on inward supplies that are liable to reverse charge in Table 4C will ensure that the tax liability is correctly reported and paid. Earlier, this was reported in Table 4A, which led to confusion and errors in reporting.

The reporting of ITC claimed on inward supplies received from registered persons that are not liable to reverse charge in Table 4D will provide a clear picture of the ITC claimed by businesses. This will enable the GST authorities to detect any fraudulent claims or non-compliance by businesses.

The reporting of ITC claimed on inward supplies received from unregistered persons in Table 4E will help businesses to claim ITC on such supplies. Earlier, businesses were not eligible to claim ITC on such supplies, which led to a higher tax liability.

The reporting of ITC claimed on inward supplies received from composition dealers in Table 4F will enable businesses to claim ITC on such supplies. Composition dealers are those who have opted for the composition scheme and pay a lower rate of tax. Earlier, businesses were not eligible to claim ITC on such supplies.

The reporting of the amount of ineligible ITC that has been reversed in Table 4H will provide a clear picture of the ITC claimed by businesses and the amount of ITC that has been reversed. This will enable the GST authorities to detect any fraudulent claims or non-compliance by businesses.

Conclusion

The changes that have been made to Table 4 of the GSTR 3B relating to the reporting of ITC availment, reversal, and ineligible ITC will have several implications for businesses. The changes will make it easier for businesses to claim ITC and report the same in their GST returns. The auto-population of ITC claimed on imports in Table 4B will reduce the burden on taxpayers and make the process more efficient. The reporting of ITC claimed on inward supplies in different tables will provide a clear picture of the ITC claimed by businesses and enable the GST authorities to detect any fraudulent claims or non-compliance by businesses. Overall, the changes will ensure that the GST system is more efficient and effective in achieving its objectives.

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Updated on:
March 16, 2024