TaxTMI 
TaxTMI 
Reversal of ITC - Not reported in Table 4 (B)(2) of GSTR-3B
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....eversal of ITC - Not reported in Table 4 (B)(2) of GSTR-3B<br> Query (Issue) Started By: - Shri Sasikumar Dated:- 24-3-2026 Last Reply Date:- 1-4-2026 Goods and Services Tax - GST<br>Got 9 Replies<br>GST<br>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 rever....
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....sal 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 ....
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....GSTR-3B and demands tax, interest and penalty. Please advise how to respond to this notice. Thanks. Reply By KASTURI SETHI: The Reply: It is a clerical error. Where is revenue loss ? In this scenario, tax and interest cannot be demanded. No question of imposition of penalty. There are case laws on the issue of minor procedural lapses in favour of tax payers. CBIC has also issued instru....
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....ctions. Reply By Raam Srinivasan Swaminathan Kalpathi: The Reply: Dear Querist Foremost, for some sage advise. Henceforth, kindly use Challan Form DRC-03 to reverse any erroneously availed ITC of the previous year. Please refrain from set off against the current year's ITC. Also, in the event of a reversal of ITC, you may also consider intimating your jurisdictional superintendent at t....
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....hat point of time. Secondly, this is purely technical lapse. Nevertheless, in my experience, department officials do not take these technical in advertances lightly. You may present your case with detailed explanations during the PH. Reply By KASTURI SETHI: The Reply: I wholly agree with the reply Sh.Kalpathi, Sir. The issue is worth winning with the support of case laws and Board's....
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.... circular. Tax/duty cannot be charged twice. However, the burden of proof is cast upon the party under Section 155 of CGST Act. Reply By KALLESHAMURTHY MURTHY K.N.: The Reply: Sir, It is purely a clerical error. Not reporting in a particular column does not prevent the payment from being recorded, and the department cannot create demand based on the reason that it was not reported in Ta....
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....ble 4 (B)(2). It is not a charging section. Any demand on this basis is without liability and legal force. Taxes must not be collected twice, as mentioned by Sri Kasturi Sethi Ji, and it is a good suggestion by Sri Kalpathi Sir to make payments through DRC-03. Reply By KASTURI SETHI: The Reply: "To correct clerical mistake is a fundamental right to do the business. The department also commits....
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...." ----Supreme Court in the case of CBIC Vs. Abedare Technologies Pvt. Ltd. - 2025 (4) TMI 101 - SC Order. CWP 6990 of 2025 Reply By Raam Srinivasan Swaminathan Kalpathi: The Reply: During PH, I would request the querist to enumerate the ITC which was found ineligible and reversed in 3B in the subsequent year with reasons thereof. Also, you may produce the ledger extracts which would confirm t....
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....he reversals in the books of account in the subsequent year. Further you may also consider taking a CA certificate confirming the above facts. A detailed submission emphasising the tax neutrality of the technical lapse, with affidavit confirming the same would add weightage to your case. Lastly, before submitting, please note to ensure that all the amounts are congruent to one another. Reply....
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.... By KALLESHAMURTHY MURTHY K.N.: The Reply: Sir, Please refer to the case Law for a similar type of error in entering the figures in the wrong column for corrections in the Returns, in the case of HINDUSTAN CONSTRUCTION COMPANY LTD., BENGALURU v/s Union of India and others - 2026 (3) TMI 1506 - KARNATAKA HIGH COURT. Reply By Pinnacle Tax Advisor: The Reply: Agreed with the expert's op....
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....inion on this matter. A demand cannot be raised merely due to a clerical error. However, the taxpayer must furnish valid proof, detailed explanations, and proper workings to demonstrate that the wrongly claimed ITC was duly reversed by netting off the input availed in subsequent months. In the absence of such documentation and justification, tax authorities may proceed to raise a demand for the ex....
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....cess ITC availed. Reply By Shilpi Jain: The Reply: The circular which has set out disclosure of reversals in table 4B 1 and 4B 2 in GSTR-3B was issued much later. Circular No. 170/02/2022 GST dated 06.07.2022, and some related changes were done in GSTR-3B vide Notification No. 14/2022 - Central Tax dated 05.07.2022. The problem is department thinks that the way the forms, portals and compl....
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....iances are today that is how they existed from time IMMEMORIAL !! You should be able to show and substantiate the reversal from your workings. A disclosure error cannot lead to tax demand more so when 3B is not allowed to be revised.<br> Discussion Forum - Knowledge Sharing ....