ITC Reporting In GSTR-9: GSTR-2A Reconciliation, Challenges, And Clarifications
BOOK A FREE DEMO
Under GST, taxpayers must file annual returns in the form of GSTR-9, which provides a summary of all the transactions undertaken during the financial year. One of the main aspects of GSTR-9 is to reconcile the ITC claimed in GSTR-3B with the ITC available in GSTR-2A. However, reconciling ITC between these two forms can be challenging due to several factors such as time lag, differences in the credit claimed, and more.
IGST credit reporting for items imported in 17–18 and claimed in 18–19
The IGST credit on importing goods for the years 17–18 that was claimed in 18–19 is not declared in a separate field in Table 8. Taxpayers were concerned that if the IGST credit was not recorded in GSTR-9, they may entirely forfeit the credit they had received in 18-19 but was connected to 17-18. As stated in Table 6(E) of the GSTR-9 form, the government has clarified that such credit for July 2017 through March 2018 has been claimed in the financial year 2018–19.
Input tax credit for goods and expenditures made between April 2018 and March 2019
The ITC granted from April 2018 to March 2019 but related to invoices from the FY 2017–18 may be stated in Table 8C of the GSTR–9, according to clarification from the government. If the credit were claimed in FY 2018–19 but was not recorded in the books of accounts, they would also need to be reported in Table 13 of GSTR–9.
GSTR-9 includes the findings of GSTR-2A vs GSTR-3B for FY 2017–18.
Table 8D of GSTR-9 lists ITC accessible in GSTR-2A but ineligible in GSTR-3B. In a recent press release, the government said, The input tax credit mentioned in Table 8D represents the credit that was available to a taxpayer in their FORM GSTR-2A during the period from July 2017 to March 2019 but was not utilised by them. Taxpayers can only get such credit after the deadline. This credit never entered any taxpayer’s computerized credit ledger. Hence it never lapsed.
The values in this table are not relevant to taxpayers as it pertains to settlement information required by the government. The value in this table may turn negative if the credit claimed in GSTR-3B exceeds the ITC available in GSTR-2A. The updated forms released on December 31, 2018, removed “Out of 8D” from Tables 8E and 8F. Hence, the sign of Table 8D is inconsequential. The lapses can be divided into two groups that are unrelated to Table 8D:
- Table 8E: ITC available but not claimed – ITC available in GSTR-2A but not claimed from July 2017 to March 2019 has lapsed.
- Table 8F: ITC available but ineligible – blocked credits, etc.
GSTR-2A’s non-reflection may disqualify a taxpayer’s credit claims. Can companies obtain credits by reflecting in GSTR-2A without meeting the other conditions? Businesses have filed GSTR-1 without paying GSTR-3B taxes. Due to factors like considering them as B2C instead of B2B, taxes have been paid in GSTR-3B but have yet to be reported in GSTR-1. Currently, the GST legislation requires specific requirements to get credits, and GSTR-2A should not affect this.
Section 16 of the CGST Act and regulation 36 enable recipients to claim ITC under certain situations. He should have the products or services and a GST-compliant tax invoice/other supply papers. Taxes must also have been paid to the government.
Based on GST laws, several have explored going without reversing the ITC in GSTR-9. Businesses should get a tax-paid confirmation letter from their suppliers to prove their eligibility for credits.
Common Errors in ITC Reporting in GSTR-9
Input Tax Credit (ITC) reporting in GSTR-9, the annual GST return, can be tricky due to the need to reconcile monthly filings with annual figures. Some common mistakes include:
- Mismatch between GSTR-3B and GSTR-2A/2B: Businesses often claim more ITC in GSTR-3B than what’s auto-populated in GSTR-2A/2B, leading to discrepancies.
- Claiming ITC on ineligible items: ITC is wrongly availed on items like employee refreshments, personal expenses, or blocked credits under Section 17(5).
- Incorrect bifurcation of ITC: Misclassifying ITC into inputs, input services, and capital goods often causes confusion during audits.
- Missed reverse charge liabilities: Failing to report ITC on RCM-paid invoices or not adjusting the liabilities correctly.
- Omission of transitional credits or carry-forwards: Some businesses forget to include credits carried forward from previous returns.
These errors may lead to notices from the GST department, ITC reversals, or penalties.
Best Practices to Ensure Accurate ITC Disclosure
To ensure error-free ITC reporting in GSTR-9:
- Regular reconciliation: Match GSTR-2A/2B with purchase registers monthly to detect mismatches early.
- Classify ITC correctly: Ensure accurate breakup between inputs, input services, and capital goods.
- Track ineligible ITC: Maintain a separate ledger to track and exclude blocked credits.
- Verify RCM compliance: Cross-check reverse charge transactions and report them accurately.
- Audit internal records: Conduct periodic internal audits or reviews to fix inconsistencies before annual filing.
How BUSY Software Simplifies GSTR-9 ITC Filing
BUSY Accounting Software helps streamline the ITC reporting process in GSTR-9 with smart features built for compliance:
- Auto-reconciliation with GSTR-2B: BUSY compares your purchase data with GSTR-2B and flags mismatches instantly.
- ITC summary reports: Easily view total eligible, ineligible, and reversed credits before finalizing GSTR-9.
- RCM handling: Track all reverse charge transactions and ensure proper ITC claims.
- One-click GSTR-9 data export: BUSY prepares structured summaries ready for GSTR-9 input.
- Error validation: The software checks for inconsistencies before return filing to avoid late corrections.
The confusion regarding Tables 6B and 6H of GSTR-9
Successfully claimed ITC on inbound goods that have never been reversed and reclaimed must be declared for Table 6B. However, disclosure of those inbound goods for which ITC was first claimed but subsequently revoked and recovered is required in table 6H.
Importance of GSTR 3B & GSTR 2A Reconciliation
GSTR 3B and GSTR 2A must be reconciled for the following reasons:
- Several taxpayers have received notices in GST ASMT-10 Form from GST authorities requesting that they reconcile the ITC claimed in GSTR 3B with GSTR 2A. The taxpayer will need to respond, or he’ll have to fork over the difference.
- Defaulters who try to claim ITC based on fraudulent invoices have also faced the consequences.
- A proper ITC reconciliation will ensure that the claimed tax credit corresponds to the paid tax.
- Only invoices can be noticed or recorded once, preventing accounting mistakes.
- Errors in the information provided in GSTR 1 or GSTR 3B may be corrected.
- To resolve any discrepancies that may arise, it is possible to notify suppliers if GSTR 1 shows that they have not adequately reported outgoing shipments.
Note: ITC reconciliation according to GSTR 3b vs GSTR 2a in GSTR 9 Tables 6 and 8 across months is also required when completing a GSTR 9 annual return.
If differences between GSTR 3B and GSTR 2A are identified about the taxpayer’s excess claim of ITC, the taxpayer will be responsible for paying the difference plus interest. Since it is the taxpayer’s responsibility to claim the appropriate amount of ITC, frequent reconciliation and matching are crucial.
Conclusion
Filing GSTR-9 accurately is crucial to avoid GST scrutiny and ensure a clean compliance record. Most errors stem from negligence in monthly ITC tracking or lack of proper reconciliation. By adopting best practices and using automation tools like BUSY Software, businesses can report Input Tax Credit with confidence and accuracy.
- GST Rates for ProductsGST Rates: GST for marriage hall GST for car GST on online gaming GST for vegetables cold drinks GST rate GST for restaurant GST on electricity GST for spices GST for bakery products GST rate for transportation GST for computer parts GST on camera GST on vehicle insurance gst on postpaid mobile bill GST for silk sarees GST on plastic items GST on consultancy services GST on movie tickets GST for electrical items GST on insurance premium
Hi there! I’m a Chartered Accountant with over 20 years of experience in financial accounting and a passion for writing. I enjoy simplifying complex topics like GST and income tax, believing that learning should be a lifelong journey. I'm here to share insights and make financial matters easier for everyone!
