Chief Editor CA Manoj Jain
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We have released our GSTR 9 solution and it is always good to start compliance preparations early to save last minute hassles. Register on irisgst.com and benefit with the early sneak peek to the solution.
Team IRIS GST
ITC Reversed in GSTR 9
We have been running a series on GSTR 9 form where we have broken the form into relatable pieces and explaining table by table how to go preparing the form.
In our previous issues, we have covered Table 4 and 5, which are related to Outward Supply and Table 6, where details to ITC claimed during the financial year are to be provided. The next section, Table 7, pertains to information related to ITC reversal.
As per GST rules, there are certain transactions on which input tax paid is not eligible to be claimed. There are other scenarios where input tax which is allowed to be claimed, need to be reversed on account some events happening.
In Table 7 of GSTR 9, all such reversal details are to be provided. There are about 40 datapoints in this table. Taxpayers will need to compute this information and will not be part of auto-drafted details.
7A Reversal under Rule 37:
Rule 37 of CGST Rules prescribes that the credit is required to be reversed in proportion to amount not paid to the counterparty within the period of one hundred and eighty days from the date of the issue of the invoice.
As per rules, the amount of input tax credit reversed as per this provision shall be added to the output tax liability of the Registered Person for the month in which the details are furnished.
Any such reversal of ITC is effected in the financial year.docx
7B Reversal under Rule 39:
Rule 39 deals with the procedure for distribution of input tax credit (ITC) by Input Service Distributor (ISD). ISD is required to distribute ITC in the manner prescribed in the sub rule 39
If any supplier gives credit note to the ISD then input tax credit is required to be reduced and shall be apportioned to each recipient in the same ratio in which the input tax credit contained in the original invoice was distributed in terms of clause (d).
In such cases, ITC will be reversed on the basis of credit note issued by an ISD.
In 7B, the amounts are to be provided as prescribed in sub-rule (1) of rule 54, to reduce the credit issued by the ISD already for any reason.
7C Reversal under Rule 42:
Rule 42 of CGST Rules describe manner of determination of input tax credit in respect of inputs or input services and reversal thereof.
In GSTR 3B, reversal under section 42 is reported and must be considered while computing the values for 7C.
7D Reversal as per Rule 43:
Rule 43 relates to ITC reversal for Capital Goods. Like Rule 42, the ITC on capital goods needs to be reversed when it is not used for business purpose or used for effecting non-taxable and exempt supplies.
These details are also reported in GSTR 3B, however there is no bifurcation between ITC reversed for input goods and services and capital goods. Hence the details need to be computed and tallied with data reported in GSTR 3B.
7E Reversal under section 17(5)
As per section 17 (5) there are ineligible credits which are required to be reversed by the Registered Person with certain exceptions.
If reported in GSTR 3B, table 4B (2) should be considered while computing the values for 7E.
Table 7F and 7G: Reversal of TRAN-I credit And TRAN-II credit
The ITC pre-GST regime was migrated through filing of TRANS I and II forms.
Transfer of taxes paid in GST regime was on selfdeclaration basis. And there may be reasons to reverse some or all of this credit due to inaccuracies in understanding the extent of transition credit permitted.
Such reversals are to be reported in 7F and 7G
Table 7H: Other reversals
For all the ITC reversals, which cannot be classified in the above sections 7A – 7G, can be reported here.
7I: Total ITC Reversed (A to H)
This is the sub-total of amounts provided in section 7A – 7H.
7J: Net ITC Available for Utilization (6O - 7I)
Represents Net ITC available for utilization from details furnished in Table-6 and Table-7.
Click here for more detailed analysis
A quick reference for the transactions which are not eligible for availing ITC
The filing due for GSTR 9, annual return form, is extended to 31st March 2019. The returns for the financial year July 2017 to March 2018 can be filed by this date
Remember to file your GSTR 3B for the month of Dec 2018, by 20th Dec 2018
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GSTR 9 Process Flow and Feature Highlight
GSTR 9 filing functionality to prepare your GST annual return has been enabled on IRIS Sapphire. The application will now let you summarize the details of your outward supply and taxes paid thereon, input tax credits claimed, taxes paid and refunds claimed through the financial year. With this, you can start preparing your GSTR 9 with IRIS Sapphire. The features will be released in phased manner as per API release from GSTN. The current update includes:
1. Get and Calculate:
2. Upload Data:
Once the data is fetched from GSTN servers, matched with your own data and uploaded in the application, you can review your data in view tab which gives table/section wise data
If there is some discrepancy, you may download this data section-wise or all sections in one go as is needed.
Similarly, section wise delete or delete data for all sections in one go is also possible
So all these feature makes your review process easier and faster. For detailed process, click here.