TaxTMI 
TaxTMI 
One of our client has claimed ITC on Purchases even though he is not required to claim as all sales are exempted sales. And till date he has not reversed ITC on same. So How to show this impact in GSTR-9. Do i need to reverse in Current month or should it be paid in DRC-03.
Reversal Of ITC
16 Aug 2019 
9 Replies 
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Reversal of Input Tax Credit: payment via DRC-03 is required though use of credit ledger is disputed.
Where a taxpayer has availed Input Tax Credit but only makes exempt supplies, practitioners recommend reversal by payment through Form DRC-03, with a notification-based view requiring cash payment for annual-return-determined liabilities. Alternative practice allows reversal by debiting the electronic credit ledger or reversing in periodic returns; interest may not arise if credit remains unutilised. The discussion notes statutory self-assessment routes to discharge tax via DRC-03 and records administrative inconsistency requiring further clarification. (AI Summary)
Where a taxpayer has availed Input Tax Credit but only makes exempt supplies, practitioners recommend reversal by payment through Form DRC-03, with a notification-based view requiring cash payment for annual-return-determined liabilities. Alternative practice allows reversal by debiting the electronic credit ledger or reversing in periodic returns; interest may not arise if credit remains unutilised. The discussion notes statutory self-assessment routes to discharge tax via DRC-03 and records administrative inconsistency requiring further clarification. (AI Summary)