Implications of amendments in GSTR-3B
This is to update you regarding amendments made in GSTR-3B vide Notification No. 14/2022 dated July 5, 2022 and also Circular No. 170/02/2022-GST dated July 6, 2022 (issued to clarify reporting changes).
Pertinently, these changes are effective from July 5, 2022, though corresponding changes have not been made on GSTN portal till now. It is expected that these changes will be made on GSTN portal for GSTR-3B of July 2022 onwards. Taxpayers are advised to consider making corresponding changes in their ERP / IT system and transaction recording process in line with these changes.
Gist of all additional reporting requirements and changes in existing reporting requirements is summarised in following paragraphs:
| Table No. | Particulars |
| Table 3.1.1 relating to supply made by and through ECO |
· E-Commerce Operators (‘ECO’) need to separately declare taxable supplies on which GST is paid by them. · Registered persons need to separately declare supplies made through ECO on which GST is payable by ECO. NITYA Comments: GST is payable by ECO on following services supplied through it: · Passenger transportation services · Housekeeping services · Accommodation services · Restaurant services Earlier ECOs and Registered persons were required to declare such supplies in Table 3.1(a) and Table 3.1(c) respectively. |
| Table 3.2 relating to inter-state supplies made to unregistered persons, composition taxable persons and UIN holders |
· Details of inter-state supplies made and declared in preceding Tables to unregistered persons, composition taxable persons and UIN holders will be auto populated basis details furnished in GSTR-1. · Taxpayers need to give effect of any amendment made in GSTR-1 related to such supplies in this Table also. NITYA Comments: Pertinently, details reflected in this Table do not get added again to output tax liability and are merely for disclosure purposes. Government requires this data for settlement of funds between Centre and State. |
| Table 4(B)(1) relating to ITC reversal under Rule 38, 42 & 43 and Section 17(5) |
ITC reversible under Rule 38 (Banks etc.) and Section 17(5) of the CGST Act needs to be reversed by declaring in this Table. NITYA Comments: Earlier, ITC reversible under Rule 42 and 43 was only reversed and disclosed in this Table. An important change is that ineligible ITC under Section 17(5) needs to be separately reversed and declared through this Table. Hence, taxpayers will need to first avail such ITC [in Table 4(A)] and thereafter reverse through this Table. This will pre-suppose taxpayers to start separately recording ineligible ITC under Section 17(5). |
| Table 4(B)(2) relating to other ITC reversals |
There is no amendment in this field in GSTR-3B. However, Circular indicates that ITC appearing in GSTR-2B which is not availed, needs to be reversed under this Table. NITYA Comments: Notably, all ITC appearing in GSTR-2B needs to be availed in Table 4(A) and ineligible ITC [except reversals under Rule 38, 42 and 43 and Section 17(5)] needs to be shown in this table. This will include following ineligible ITC (as clarified by Circular): · ITC appearing in GSTR-2B on goods or services not received (deferred ITC). · ITC not pertaining to taxpayer, however, appearing in GSTR-2B due to wrong GSTIN reported by supplier. · ITC not available due to non-payment of consideration to supplier within 180 days. Legally, ITC under Section 17(5) and ITC on goods and services not received is not eligible ITC and should not be reflected under Table 4A under ‘ITC Available’. Being a substantive change, this ought to have been introduced through Notification or in Instructions to GSTR-3B and not by issuing Circular. This change will again pre-suppose taxpayers to distinctly record deferred ITC (which was not recorded till now). Further, there is no specific table for availing deferred ITC in next month and thus, such ITC needs to be included in Table 4(A) only. |
| Table 4(D) relating to ITC reclaimed and other ineligible ITC |
This Table is only for disclosure and does not impact ITC availed or reversed. Taxpayers need to declare following ITC in this Table: · ITC declared in Table 4(B)(2) in previous period and availed in subsequent period. · ITC appearing in GSTR-2B but not availed due to passing of timeline under Section 16(4). |
We have explained ITC related changes vide an illustration showing comparative declaration of ITC before and after amendment hereunder.
Data for July and August 2022 is presumed as under:
| Particular | GST | |
| July | August | |
| Eligible ITC appearing in GSTR-2B (A) | 9,80,000 | 12,00,000 |
| Ineligible ITC under Section 17(5) appearing in GSTR-2B (B) | 20,000 | 50,000 |
| Eligible ITC available in books of accounts (C) | 9,50,000 | 11,50,000 |
| Ineligible ITC under Section 17(5) as per books of accounts (D) | 20,000 | 40,000 |
| Reversal under Rule 42 (E) | 10,000 | 5,000 |
| ITC reversible due to non-payment to supplier within 180 days (F) | 50,000 | – |
| ITC to be re-availed on subsequent payment to supplier (G) | 35,000 | 15,000 |
| ITC on invoices appearing in GSTR-2B of previous month recorded in books of current month (H) | – | 20,000 |
| Ineligible ITC due to POS falling in other State (included in A and C) (I) | 10,000 | 5,000 |
Table 4 – Eligible ITC
| Details | Reference | July – Pre amendment | Reference | Post amendment | |
| July | August | ||||
| 1 | 2 | 3 | |||
| (A) ITC Available (whether in full or part) | |||||
| (1) All other ITC | C + G – I | 9,75,000 | A + B + G + H – I | 10,25,000 | 12,80,000 |
| (B) ITC Reversed | |||||
| (1) As per Rules 42 and 43 of CGST Rules / As per Rules 38, 42 and 43 of CGST Rules and Section 17(5) | E | 10,000 | D + E | 30,000 | 45,000 |
| (2) Others | F | 50,000 | (A + B) – (C + D) + F | 80,000 | 60,000 |
| (C) ITC Available (A)-(B) | 9,15,000 | 9,15,000 | 11,75,000 | ||
| (D) Ineligible ITC / Other Details | |||||
| (1) As per Section 17(5) / ITC reclaimed which was reversed under Table 4B(2) in earlier tax period | D | 20,000 | G + H | 35,000 | 35,000 |
| (2) Others / Ineligible ITC under Section 16(4) and ITC restricted due to PoS provisions | I | 10,000 | I | 10,000 | 5,000 |
Notes:
- Fields marked in ‘blue’ are amendments made in Table-4.
- Fields marked in ‘red’ are declarations required pre amendment.
- In this illustration, amounts mentioned in G & H are added and I is manually deducted from amount auto populated from GSTR-2B in Table 4(A)(5).
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