ITC reversal in GSTR 9 for F.Y. 2024-25

[JIGNESH SITAPARA]

Dear Experts,

I wish to reverse ITC which was credit against CONSTRUCTION COMMERCIAL BUILDING. Now, I wish to same ITC reverse in GSTR-9. Please guide me which table mention this ITC ?

[Sadanand Bulbule]

In your case, reversal of blocked ITC falls under Section 17(5)(d) of the CGST Act, 2017. GSTR-9 is only a reporting annual return.

So such ITC has to be reversed via GSTR-03 as ineligible ITC.

[Ryan Vaz]

1) Issue Summary

You need to identify the correct table in Form GSTR-9 (Annual Return) to report the reversal of Input Tax Credit (ITC) related to the construction of a commercial building, which is generally a blocked credit, and understand the associated payment mechanism.

2) Applicable Law / Notification / Circular

• Section 17(5)(c) & (d) of the CGST Act, 2017: Blocks ITC on works contract services and goods/services used for the construction of immovable property (other than plant and machinery) on ones own account.
• Section 50(3) of the CGST Act, 2017: Mandates interest on ITC widely availed and utilized.
• Rule 80 of CGST Rules, 2017: Governs the filing of the Annual Return (GSTR-9).
• Instructions to Form GSTR-9: specifically regarding Table 7 (Details of ITC Reversed and Ineligible ITC for the financial year).
• Form DRC-03: For voluntary payment of tax/ITC reversal not paid through GSTR-3B.

3) Short Practical Answer

You should report this reversal in Table 7E ("ITC reversed... under section 17(5)") of Form GSTR-9. Since you are reversing this credit now (likely after the time limit for amending GSTR-3B has passed), reporting it in GSTR-9 serves as a declaration; however, GSTR-9 does not have a mechanism to debit your electronic credit ledger. Therefore, you must pay the reversal amount equivalent to the ITC plus applicable interest using Form DRC-03.

[Shilpi Jain]

If its for past FY reverse through DRC-03 and while the reversal appears as a reconciling item in GSTR-9C - give reason with ref of DRC -03 payment

AI Summary

Reversal of ITC for commercial building must be reported in GSTR-9 Table 7E and paid via DRC-03. ITC on construction of a commercial building is blocked under Section 17(5) and must be reported in Form GSTR-9 Table 7E as ITC reversed; GSTR-9 only discloses the reversal and does not debit the electronic credit ledger, so the tax-equivalent amount and applicable interest must be paid via Form DRC-03 and reconciled in GSTR-9C with reference to the DRC-03 payment.