Reversal of ITC - Not reported in Table 4 (B)(2) of GSTR-3B

[Shri Sasikumar]

Dear Experts,

During FY 2018-2019, the company has wrongly availed certain ITC and the same was noticed in the subsequent year 2019-2020 - May 2019 3B and voluntarily reversed it. Such reversal was reported in GSTR-3B, by netting off from All Other ITC of May 2019 eligible ITC, instead of reporting in Table 4 (B)(2). While filing Annual Return in GSTR-9 for the FY 2018-2019, the auditor also reported this reversl in Part V of Entry 12 and calculated the interest and paid via DRC-03.

Now the GST Officer deny the reversal for the reason that it was not reported in Table 4 (B)(2) of GSTR-3B and demands tax, interest and penalty.

Please advise how to respond to this notice.

Thanks.

AI Summary

Input tax credit reversal treated as a technical lapse where supporting records show the reversal was duly made.
Wrongly availed input tax credit reversed in a later period by netting it off in GSTR-3B, instead of reporting it in the specified reversal table, was treated as a clerical or technical lapse. The discussion states that a reporting error alone should not justify tax, interest, or penalty if the reversal can be substantiated through return workings, ledger extracts, explanations, and supporting documents. Voluntary reversal through DRC-03 and proper evidence were suggested to demonstrate that there was no revenue loss and that the reversal was duly made.