Wrongly Reverse ITC

[Uttam Giri]

In GSTR 3B Wrongly Reverse ITC in Table 4(b)(1) in place of 4(b)(2). Now GST department sens a notice. So what is implications for wrongly filling GSTR 3B?

[KALLESHAMURTHY MURTHY K.N.]

Sir,

If the department insists on reversal due to ineligible ITC availed, you are required to reverse it. But not required to pay interest since ITC is already with the department. You can apply for a refund for entries in the wrong col. subject to other conditions and restrictions.

 As per recent changes, Col. 4(B)(1) is for ITC not liable to reclaim. 

[Shilpi Jain]

Need further details on this. What is the period when this reversal was done.

Why was it to be done as a temporary reversal, goods not recieved or anything else?

What does the dept notice state? 

[Shilpi Jain]

Anyway note that the disclosure requirements are mentioned in a circular and not stipulated in the rules.

[Uttam Giri]

Dear Madam,

Already filled GSTR Annual return also, we are reversed the ITC permanently instead of temporarily reversed table. And same we reclaimed on subsequent months when it is realised in our books of accounts. So, GSTR department says after showing in table 4(b)(1), you can not reclaimed.Now what will be the penalty and the implications? 

[KALLESHAMURTHY MURTHY K.N.]

Sir, 

The Assessing Authority or the Adjudication Authority should have determined the liability to reversal of ITC to be reported in Table 4(B)(1) with the documents and books of accounts. Just because of entries in the wrong col., it cannot be treated as such. It is a human error and is liable to a refund. In respect of the actual liability to be reported in actual col. (but not reported because of wrong entries), the AA may demand the reversal of ITC  with applicable interest and penalty. However, as the amount has already been deposited, interest & penalty may not be payable.

AI Summary

User Reversed ITC in Wrong GSTR 3B Section; Experts Say Interest May Not Apply, Refund Possible A user mistakenly reversed Input Tax Credit (ITC) in the wrong section of their GSTR 3B form, prompting a notice from the GST department. Experts advised that if the department demands reversal due to ineligible ITC, it must be reversed, but interest may not be required as the ITC is with the department. Refunds for incorrect entries can be sought, subject to conditions. The error, labeled as human, may not necessarily incur penalties if the amount is already paid. The user also queried about potential penalties for reclaiming ITC after permanent reversal, which experts suggested may not apply.