CBIC Mandates Furnishing Of Correct Information Of Inter-State Supplies And ITC Reversal In FORM GSTR-3B And FORM GSTR-1

Over time, the procedure of submitting returns has been streamlined. With effect from December 2020, FORM GSTR-3B is auto-generated on the portal by auto-population of ITC from FORM GSTR-2B and auto-population of liabilities from FORM GSTR-1. The registered person has the option to edit it.

However, the CBIC observed that there were still some infirmities in information being furnished by the registered person in relation to inter-state supplies affected to unregistered persons, registered persons paying tax (composition taxable persons) and UIN holders. There appeared to be a lack of clarity regarding the reporting of information about reversal of ITC as well as ineligible ITC in Table 4 of FORM GSTR-3B.

The circular stated that the correct reporting of information is done by the registered person on FORM GSTR-3B and FORM GSTR-1 so as to ensure correct accounting and accurate settlement of funds between the Central and State Governments. Accordingly, in order to ensure uniformity in return filing, the Board has issued clarification.

The board advised that registered persons making inter-State supplies to unregistered persons must also report the details of the supplies, location-wise, in Table 3.2 of FORM GSTR-3B and Table 7B or Table 5 or Table 9/10 of FORM GSTR-1, as applicable.

The registered persons making inter-State supplies to the registered persons paying tax under section 10 of the SGST/CGST Act and to UIN holders, shall also report the details of such supplies, place of supply-wise. The details shall be furnished in Table 3.2 of FORM GSTR-3B and Table 4A or 4C or 9 of FORM GSTR-1, as the case may be.

When filing their return, registered persons making inter-state supplies must update their customer database with the correct state name and ensure that the correct PoS is declared in the tax invoice and in Table 3.2 of FORM GSTR-3B.This is to ensure that tax reaches the consumption state as per the principles of a destination-based taxation system.

"It is further advised that any amendment carried out in Table 9 or Table 10 of FORM GSTR-1 or any entry in Table 11 of FORM GSTR-1 relating to such supplies should also be given effect while reporting the figures in Table 3.2 of FORM GSTR-3B," the circular read.

Any reversed ITC or ITC that is ineligible under any provision of the CGST Act should not be included in the Net ITC Available in Table 4(C) and, as a result, should not be credited to the registered person's ECL.

"ITC not available, on account of limitation of time period as delineated in sub-section (4) of section 16 of the CGST Act or where the recipient of an intra-State supply is located in a different State/UT than that of the place of supply, may be reported by the registered person in Table 4D (2). Such details are available in Table 4 of FORM GSTR-2B," the CBIC notified.

The reversal of ITC of ineligible credit under section 17(5) or any other provisions of the CGST Act and rules is required to be made under Table 4 (B) and not under Table 4 (D) of FORM GSTR-3B.

Circular No. 170/02/2022-GST

Dated: 6.07.2022

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