Reversal under Table 4.B.1 of GSTR-3B and reclaim

[vikash YADAV]

Is it possible to reclaim the ITC reversed under table 4.b.1 for 17(5) matter in subsequent year own his own without applying for any refund etc. citing the reason as reporting error.??

[Sadanand Bulbule]

The ITC was inadvertently reversed in Table 4(B)(1) of GSTR-3B treating it as blocked under Section 17(5) of the CGST Act due to a reporting error, and since the credit was otherwise eligible and originally availed within the time limit prescribed under Section 16(4) of the Central Goods and Services Tax Act, 2017, its reclaim in Table 4(D)(1) deserves as rectification of an inadvertent reversal, as the same does not amount to fresh availment of ITC and causes no loss of revenue to the Government.

[KALLESHAMURTHY MURTHY K.N.]

Sir,

I follow the reply of Sri Sadanand Bulbule Sir.

[vikash YADAV]

What is the purpose of these tables if everything is dismissed under the pretext of an "inadvertent error"?

Furthermore, there is no logical connection between sections 4.b.1 and 4.d.1.

[Sadanand Bulbule]

The simultaneous presence of Table 4(B)(1) and Table 4(D)(1) in GSTR-3B reflects a deliberate legislative design-since law never creates statutory fields without purpose-intended to permit reversal of ITC when circumstances so require and its subsequent restoration when eligibility is established, thereby ensuring that legitimate credit is not permanently forfeited due to temporary reversals or reporting errors.

In case of further doubts, visit the nearest GST office.

 

[vikash YADAV]

The dept is saying once reversal made under 4.b.1 by mistake you have to make application for refund. If reclaimed on his own then you have to reverse again by way of DRC-03

[KASTURI SETHI]

The departments view is legally correct. Self-adjustment was allowed in Service Tax era and, that too, with some condition.

[Shilpi Jain]

Inadvertent reversal should be allowed to rectify / revise returns. Though no such facility available under GST.

Considering the amount involved one could consider re-availing and making an intimation to department that the error has been rectified by taking credit and disclosing in 4D1.

One could also look at re-credit claim balance to take a call in this regard.

Applying for refund could be cumbersome process.

[Shilpi Jain]

Additionally the understanding of 4B1 being permanent reversal etc. is only coming from a circular without any legal provision backing.

[vikash YADAV]

The TP after the aforesaid reversal under 4.b.1, filed GSTR-9, GSTR-9C etc wherein he maintained the reversals the position made under 4.b.1, suddenly in next year he realised the mistake and reclaimed under 4.a.5 of GSTR-3B.

i think it's wrong.

[KALLESHAMURTHY MURTHY K.N.]

Sir,

Table 4(B)(1) is provided in GSTR-3B for reporting of reversal of ITC of a permanent nature, like restriction u/s 17(5) and Rule 38, 42 or 43, where it is considered to be ineligible to avail.

If the reversal was due to Rule 37 - Non-payment of the sale consideration within 180 days, in case of goods not received hit by Sec. 16(2)(b) and Sec. 16(2)(c) where ITC not paid by the supplier (but subsequently recovered) and reversal by an inadvertent error, it should be reported in 4(B)(2) which is meant for temporary reversal and not 4(B)(1). However, sometimes taxpayers mistakenly used 4(B)(1).

If the taxpayer realises the mistake in the next year, they can reclaim it under 4(A)(5) and report it in 4(D)(1). However, such a reclaim is regulated by the time limit specified under Sec. 16(4).

Although it is necessary to intimate in writing to the jurisdictional officer explaining that the reversal in 4(B)(1) was an error, citing the "inadvertent error" clause to avoid unnecessary audit queries. Even if the department does not accept it, it should be applied for the refund.

In my view, any human error is rectifiable, where the reversal does not have statutory force.

AI Summary

Input tax credit reclaim after inadvertent GSTR 3B reversal may be allowed if eligibility and time limits are met.
If ITC reversed in Table 4(B)(1) was in fact eligible and originally availed within the statutory time limit, restoration by reporting in Table 4(D)(1) after disclosure in 4(A)(5) can operate as rectification of an inadvertent reversal, but reclaim is subject to the time bar and may require written intimation to the jurisdictional officer or a formal refund/application if the department does not accept unilateral adjustment.