Reversal of ITC in GSTR 9

[Vinod Maheswari]

Dear Sir

In FY 2017-18 I have wrongly taken ITC which is duly reversed in GSTR-3B of FY 2018-19.

So please tell me the way i have to show this in GSTR-9 (Annual Return). if i reversed the amount in GSTR-9 of FY 2017-18 than i have to make the payment through DRC-3. As i have already adjusted this Excess ITC in my GSTR-3B of FY 18 19 then any payment regarding this reversal will impact double reversal (I.e Ist in GSTR-9 of FY 2017-18 and 2nd in GSTR-3B of FY 18 19).

Thanx

[KASTURI SETHI]

Wrongly taken ITC has been reversed in 18-19. That tantamounts to ITC not taken. It has been neutralized. How it is double taxation ? Also see reply against Issue Id No.115068 dated 13.6.19.

If there is any kind of mismatch of figures reflected in GSTR-9, you will have to pay additional liability in cash through Form DRC-03 in terms of Notification No.74/18-CT dated 31.12.18 Serial No.9 above Table No.17 in this notification.

If you still think you have paid in excess via double taxation, you can apply for refund or re-credit. Pl. elaborate your query further how it will be double taxation.

[Vinod Maheswari]

Dear Sir

I am concern about how to show my transaction in annual return. I can explain through following example.

In FY 2017-18 my total credit was ₹ 100000/= out of which ₹ 10000 was wrongly taken which was reversed in GSTR-3B of FY 2018-19. Now my input credit detail for 2 financial year are as follows:-

FY Availed Input

[Vinod Maheswari]

Dear Sir

I am concern about how to show my transaction in annual return. I can explain through following example.

In FY 2017-18 my total credit was ₹ 100000/= out of which ₹ 10000 was wrongly taken which was reversed in GSTR-3B of FY 2018-19. Now my input credit detail for 2 financial year are as follows:-

FY 2017-18 Availed in Books & GSTR-3B 100000/= (out of this 10000/= wrong input)

FY 2018-19 Availed in Books (₹ 80000) shown in GSTR-3B (₹ 70000 after adjusting 10000 for FY 2017-18)

Now Please let me know how to show the same in Annual Return of both year. If in FY 2017-18 if i show it as ₹ 90000/=(i.e 100000-10000) then Can I increase my input credit in annual return FY 2018-19 by ₹ 10000/=(i.e 80000).

[KASTURI SETHI]

Practice adopted by you in 17-18 and 18-19 both are legally wrong. You can not increase ITC as per your will in annual return. There are restrictions regarding editing of some Tables in Annual Returns. You have not read the format as well as instuctions contained in Annual return thoroughly and carefully. Read all Tables and instructions and you will find answer to your queries. I would suggest you to wait for the result of GST Council meeting to be held on 21.6.19. Some relaxations may be expected.

[Ganeshan Kalyani]

I agree with Sri Kasturi Sir's reply.

[KASTURI SETHI]

(1) You have taken excess ITC which is an offence/contravention and this is not in dispute.at all.

(2) Availing less credit in the next year or next month cannot be called reversal at all. You are required to pay the excess amount of credit taken in cash along with interest. If you pay along with interest on your own penalty is not imposable. Interest will also be chargeable @18% otherwise rate of interest will be @24% (on account of mala fide intention).

(3) You have taken less credit in a month that can be taken within prescribed period. It is your substantive right. There is no dispute or doubt at all. You used the word,"increase" which is not appropriate. You are not increasing. Rather you are making up your loss in this way.

Thus there will be no double taxation and your figures will also match.Notification demands cash.

[Vinod Maheswari]

Dear Sir

I agree with you that I have taken excess credit in FY 2017-18 so i have to pay it wth interest.

but what about that credit which i have reversed in FY 2018-19 pertainiing to FY 2017-18 (which you are saying that i have to pay with interest)

Secondly my original question was not of double taxation but was how to show the same in Annual Return of FY 2017-18 and FY 2018-19.

[KASTURI SETHI]

In the year 2018-19, you have not reversed the credit but you have taken less credit in lieu of excess credit taken in 17-18. You can take this credit in any month up to filing return for the month of Sept., 19.

The amount to be paid in cash through Form DRC-03 will be shown in Table No.14 of Annual Return (GSTR-9).

There is a difference between 'reversal of credit' and 'availing less credit'. That is to be understood.

[Saurabh Kataria]

Can i reverse excess input tax credit of f.y 2017-18 on today through DRC-3 by using electronic credit ledger balance.?

[KASTURI SETHI]

Not at all. Only in cash. Through Electronic Cash Ledger.

[Atul Rathod]

Show in table 12 of GSTR-9 as it specifically given for the transaction pertains to 2017-18 declared in the return of the year 2018-19.

[Nandan Khambete]

Electronic Credit Ledger can be very well be used first to payment of liability through DRC 03. Balance liability if any can be paid by Cash.

AI Summary

Clarification on Reversing Incorrectly Availed ITC in GSTR-9 and Avoiding Double Taxation for FY 2017-18 and 2018-19 In a discussion on the reversal of Input Tax Credit (ITC) in GSTR-9, a participant raised a query about incorrectly availed ITC in FY 2017-18, which was reversed in GSTR-3B for FY 2018-19. The concern was how to reflect this in the annual return without causing double taxation. Another participant clarified that the reversal in FY 2018-19 neutralizes the error, and any mismatch in GSTR-9 requires payment through Form DRC-03. Further replies emphasized that the practice of adjusting ITC across fiscal years is incorrect, and any excess credit must be paid with interest, not adjusted at will. The discussion also covered the technicalities of using the Electronic Cash Ledger and the appropriate tables in GSTR-9 for reporting such transactions.