HOW TO REVERSE THE ITC CREDIT LEDGER BALANCE AMOUNT

[P Ravi Prasanna Kumar]

We have credit balance in the ledger at the time of migration from regular dealer to composite dealer. We want to reverse the ITC available in the credit ledger. 

AI Summary

GST taxpayer transitioning from regular to composite dealer must reverse remaining ITC balance using Form DRC-03 A GST taxpayer migrated from regular dealer status to composite dealer and needed to reverse Input Tax Credit (ITC) balance remaining in their credit ledger. Three tax professionals provided guidance on the reversal process. The first expert recommended reversing the credit through returns filing, preferably using Form DRC-03 with specific remarks explaining the reversal. The second expert emphasized that DRC-03 is the optimal method as it provides independent and specific documentation that will prevent audit complications later. The third expert concurred with the previous recommendations. All responses consistently favored using Form DRC-03 as the preferred mechanism for reversing ITC credit balances during the transition from regular to composite dealer status under GST regulations.