On 17th September 2025, the CBIC announced the CGST 3rd Amendment Rules, 2025, via Notification No. 13/2025. Effective from 22nd September 2025, these amendments introduce key changes in the reporting of Input Tax Credit (ITC) in the Annual Return Form GSTR-9.
Key Changes in ITC Reporting Under GSTR-9
- The important amendments of ITC disclosure in Part III of GSTR-9. New fields have been inserted to distinguish between ITC of the current fiscal year and ITC carried forward from the previous year. New K1 and K2 Fields: taxpayers should report ITC of the previous year consumed in the current year under Rules 37 and 37A in “K1,” while “K2” will capture net ITC for the financial year after adjusting for such carry-forward credits.
- Revised Table 7 ITC Reversals: Table 7 has been restructured to contain separate reporting of reversals under Rule 37A (linked to timely payment to suppliers) and Rule 38 (for banking and financial institutions). This ensures granular tracking of reversals for compliance conditions.
- Auto-Populated Data: Table 8 auto-populates specific ITC numbers from GSTR-2B that contain ITC on imports and amendments, thus reducing manual intervention and aligning annual return disclosures with system-generated data.
- Deferred ITC Reporting: New provisions mandate disclosure of ITC about invoices or imports of 1 year that are actually taken in the following financial year, with a clear cut-off date of 30th November of the following year.
- Refined Reconciliation in Table 9: The format of Table 9 has been changed to deliver reconciliation of tax payable and tax paid through cash and ITC utilisation, capturing differences in liability release.
- Tables 10 -14 Reorganised: Adjustments of amendments, reversals, and ITC claims in the following year should be clearly expressed. This can strengthen audit trails and support departmental scrutiny.
Implementation Timeline and Compliance Implications
From 22nd September 2025, most provisions shall be effective, specific revisions have staggered applicability, like Rule 39 amendments effective 1 April 2025 and refund-related restrictions on arecanut, pan masala, and tobacco under Rule 91 effective 1 October 2025.
The revamp is anticipated to improve the system-driven validations among GSTR-3B, GSTR-2B, and GSTR-9, thereby minimising discrepancies.
Businesses can encounter compliance intricacy in reconciling carry forward and deferred ITC, requiring internal controls and robust GST accounting systems, and timely updation of GST Rates and other facts in software, and ensuring skilled staff training.
Read GST Notification No. 13/2025
