GSTN new ledger for ITC reversal, reclamation: Steps that taxpayers have to take

In a bid to simplify compliance and supply higher visibility to the regulator, the Goods and Services Tax Network (GSTN) has launched an all-new ledger to trace the reversal and reclamation of the Input Tax Credit (ITC). Known as Electronic Credit and Re-claimed Statement (ECRS), it’ll present taxpayers with the stability of all enter tax credit score that has been reversed and reclaimed on a selected date.

What are the following steps that taxpayers have to take?

As a direct subsequent step, taxpayers should report the amassed ITC reversed stability as a one-time motion. The similar will must be executed by thirtieth November 2023. 

“For month-to-month filers, the ITC reversed till the July 2023 return interval will must be reported, whereas for quarterly filers till the April to June 2023 return interval. Between thirtieth November and thirty first December 2023, taxpayers will solely be allowed to amend their opening stability as much as a most of 3 times. Post thirty first December 2023, the choice to amend the opening stability will even be withdrawn,” stated Archit Gupta, Founder and CEO, ofClear.

Taxpayers can entry the ledger and report opening balances in two methods.

1) log in to GST portal >> Go to ‘Report ITC Reversal Opening Balance’

2)Go to ‘Services’ from the homepage >> Go to ‘Ledger’ >> Click on ‘Electronic Credit Reversal and Re-claimed Statement’ >> Click on ‘Report ITC Reversal Opening Balance’

Archit Gupta listed 5 important measures that may assist taxpayers handle ITC reversals and reclaim higher

-A radical reconciliation is to be executed from April 2022 until date to find out ITC claimed, reversed, reclaimed, ineligible ITC, and pending reclaims and arrive on the opening stability for the ITC reversal assertion.

-A separate ledger is to be created within the books of accounts, if not practiced earlier, for all ITC reversals and reclaims going ahead.

-A separate ledger within the books of accounts is to be created for momentary ITC reversals with out mixing them up with everlasting ITC reversals or ineligible ITC.

-A path of all ITC claimed, reversed, and reclaimed is to be maintained to have the ability to map the ITC reclaims again to the preliminary ITC claims and be audit-ready.

-Frequent reconciliations of GSTR-2B vis-à-vis GSTR-3B and buy register have to be carried out throughout tax intervals to keep away from double reclaims or lacking reclaims.

Meanwhile, as per a report in PTI, the GST Network has enabled geocoding performance for the ‘additional place of business’ handle of GST-registered companies throughout all states and union territories. The transfer is geared toward curbing fraudulent registrations underneath Goods and Services Tax (GST) by giving bogus addresses for the aim of claiming ITC.

Disclaimer: The views and proposals made above are these of particular person analysts, and never of Mint. We advise traders to test with licensed specialists earlier than taking any funding choices.

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Updated: 21 Sep 2023, 08:24 AM IST