The Institute of Chartered Accountants of India (ICAI) has published a technical document titled “Practical FAQs on Filing of Form GSTR-3B.” This publication provides important clarifications and guidance on various issues related to the filing of FORM GSTR-3B under the GST regime.
The publication addresses issues and recurring practice problems which the taxpayers, professionals, and businesses encounter at the time of reporting Input tax credit, Reverse Charge Mechanism (RCM) liabilities, reclaim of reversed credits, interest computation, and reconciliation challenges in GST returns.
Explanations on ITC Reversal and Reclaim Mechanism
Detailed clarification for reporting of temporary and permanent ITC reversals in Table 4(B)(1) and Table 4(B)(2) of FORM GSTR-3B is the publication’s crucial highlights, among others.
As per ICAI
- Table 4(B)(1) is for permanent and non-reclaimable reversals such as blocked credits u/s 17(5) and reversals under Rules 38, 42, and 43
- Table 4(B)(2) is for temporary and reclaimable reversals
- The Electronic Credit Reversal and Reclaimed Statement (ECRRS) tracks only those reversals reported in Table 4(B)(2)
The publication illustrates the procedural treatment for mistakenly reporting errors and approaches for rectifying reclaim ledger imbalances in the following returns.
Guidance on ITC Reverse Charge Mechanism (RCM)The
FAQ guide provides practical explanations for:
- “RCM liability on import of services”
- “Reporting of RCM ITC under the correct tables in GSTR-3B”
- “RCM transactions involving unregistered persons”
- “Self-invoicing requirements under Section 31(3)(f)”
- “Proper disclosure of RCM liabilities in Table 3.1(d) and corresponding ITC claims in Table 4(A)(2)/(3)”
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As per ICAI, mere procedural misclassification of eligible ITC between different reporting tables shall not result in the refusal of ITC where tax has been duly paid, and substantive conditions are fulfilled.
Clarification on Rule 86B Compliance
Also, publication addresses practical problems of non-compliance with Rule 86B of the CGST Rules, 2017, where taxpayers mistakenly release exceeding than 99% of output tax liability via ITC instead of the mandatory 1% cash payment.
As per ICAI, these exces usage of ITC does not refute the ITC itself but results in procedural non-compliance needing corrective payment via Form DRC-03.
Resolving IMS and GSTR-2B Related Issues
The publication includes a clarification concerning-
- “Treatment of credit notes under the Invoice Management System (IMS)“
- “Prevention of double ITC reversal”
- “Handling deemed accepted credit notes”
- “Non-reflection of Bills of Entry in GSTR-2B”
- “Correct use of IMS declaration facilities to avoid system validation errors”
ICAI specified that eligible ITC on import of goods can still be claimed as per the Bill of Entry and proof of tax payment, even when it is not shown in FORM GSTR-2B due to ICEGATE transmission delays.
Explanations regarding GSTR-1A and Negative Liability Adjustment
FAQ guides deliver practical guidance for:
- “Use of FORM GSTR-1A for skipped invoices before filing GSTR-3B;”
- “Adjustment of negative liability statements generated due to excess credit notes; and”
- “Editability of interest and late fee auto-populated in Table 5.1 of GSTR-3B.”
Effective Resource for Taxpayers and Professionals
According to ICAI, the development of the publication is to support taxpayers and professionals in navigating practical return filing issues under GST and ensuring precise compliance with evolving GSTN system validations and procedural pre-requisites.
It is anticipated from the publication that it will serve as a useful reference resource for Chartered Accountants, GST practitioners, businesses, and tax compliance teams dealing with GSTR-3B reporting and reconciliations.
Read Practical FAQs
