Taxpayers are required to meticulously verify the accuracy of information submitted in the GSTR-9 annual return. Since the GSTR-9 cannot be revised once filed, it is critical to ensure that all input tax credit (ITC) claims are precisely reported.This article details the process of reporting ITC within the GSTR-9 return, outlining the relevant tables for ITC declaration and offering best practices for reconciling any differences in ITC for the financial year. It also emphasizes that no new ITC claims for FY 2022-23 can be made in the GSTR-9.

Latest Updates on GSTR-9 Filing

August 4, 2023 The 50th GST Council meeting, held on July 11, 2023, recommended extending the relaxations for various tables in Forms GSTR-9 and 9C from FY 2021-22 to FY 2022-23. The CBIC formally announced these relaxations on August 4, 2023, via Notification No.38/2023.

July 31, 2023 The CBIC granted an exemption from filing GSTR-9/9A for small taxpayers with an aggregate annual turnover of up to Rs. 2 crore for FY 2022-23.

Reporting Input Tax Credit in GSTR-9

Input tax credit claims for a financial year must be reported in the GSTR-9 return across Tables 6, 7, and 8. For a detailed guide on how to complete ITC information in these tables, refer to the detailed instructions here.

Table 6: Input Tax Credit (ITC) Availed During the Financial Year

This section requires comprehensive details of ITC availed on:

• Regular inward supplies (requiring bifurcation into inputs, capital goods, and input services)
• Inward supplies subject to Reverse Charge Mechanism (RCM) (requiring bifurcation into inputs, capital goods, and input services)
• Import of goods (requiring bifurcation into inputs and capital goods)
• Import of services
• Common credit distributed by an Input Service Distributor (ISD)
• Amount of ITC reclaimed (not already reported in 6B)

Any ITC to be claimed as transitional credit during the adoption of the GST regime must also be reported in this section.

Table 7: Details of Reversed and Ineligible Input Tax Credit

Similar to Table 6, Table 7 also provides a breakdown of ITC. However, this table specifically covers details of ITC reversed under:

• Rule 37 - Due to non-payment of consideration within 180 days as per CGST Section 16(2)
• Rule 39 - For ITC distributed by an ISD
• Rule 42 - For goods/services partially used for business and partially for other purposes
• Rule 43 - For capital goods partially used for taxable supplies and partially for zero-rated or exempted goods
• Section 17(5) - For ineligible ITC under GST law on specific goods and services
• Rule 38 - For ITC reversal by banking companies
• Rule 44 - For ITC reversal under special circumstances
• ITC 03 - For taxable goods becoming exempted during the year

Any reversal related to transitional credit from the GST regime adoption also needs to be reported here.

Table 8: Other Input Tax Credit Information

Table 8 includes ITC-related data not covered in Table 6 or 7, such as:

• ITC on inward supplies (excluding imports and RCM supplies) received in the previous financial year but claimed in the current financial year
• ITC available but not claimed
• ITC available but considered ineligible
• IGST paid on the import of goods

Furthermore, Tables 12 and 13 are used for reporting ITC pertinent to FY 2022-23 but reversed or availed in other financial years:

Key Verification Points for Input Tax Credit Reporting

Taxpayers must adhere to the following checkpoints to ensure precise ITC reporting in GSTR-9:

• Reverse any ineligible ITC, whether temporary or permanent, and ensure the reporting of reclaims from that financial year if previously missed. Refer to CGST Rules 37, 42, 43, etc.
• Perform vendor-wise reconciliations to identify and communicate with vendors if any ITC claimed in prior returns needs reversal due to vendor underreporting for FY 22-23.
• Report the opening balance for the electronic credit reversal and reclaim statement for temporary ITC reversals from April 2022 to July 2023.
• Ensure any ITC adjustments reported through debit notes or credit notes issued by vendors in FY 22-23 against purchase invoices are correctly reported for the financial year.
• Verify that vendors have remitted the corresponding taxes to the government for FY 22-23.
• Check taxes payable versus those paid under the Reverse Charge Mechanism (RCM) and pending ITC claims for the financial year related to goods/services used for business.
• File amendments for any rectified information reported in GST returns filed during the financial year.
• Compare the annual Income Tax Return (ITR) with the Annual GST Return (GSTR-9).
• Review the purchase register for 22-23 and various expense ledgers, such as bank charges and stock insurance premium accounts, to identify any omissions in the GSTR-3B or necessary adjustments.
• Keep the purchases and input tax general ledger aligned with the purchase register, with exceptions for specific line items like intra-company stock transfers and cross charges.

Best Practices for Error-Free Input Tax Credit Reporting in GSTR-9

Here are some leading practices for accurately filing GSTR-9:

1. Document the bifurcation of input tax credit in different ledgers as inputs, input services, and capital goods in your books to facilitate reconciliation and reporting.
2. Businesses should maintain distinct documentation for inputs used for taxable and exempt supplies to prevent complexities in reporting.
3. Businesses must verify the status of vendor payments at the close of 19 months from the financial year's commencement to identify any potential missed ITC reversals.

I. Discrepancies Between ITC Claimed in GSTR-3B and GSTR-9 (Table 6I of GSTR-9)

Excess reported (ITC in draft GSTR-9 exceeds ITC claimed in GSTR-3B):

• If the ITC amount was incorrectly reported, reduce the amount from Table 6 of GSTR-9.
• If the ITC amount was claimed in GSTR-3B filed in FY 2023-24 up to the specified time, show the differential amount under Tables 8C and 13, while reducing it from Table 6 of the draft GSTR-9.

Short reported (ITC in draft GSTR-9 is less than ITC claimed in GSTR-3B):

• Due to incorrect ITC reversals: Reduce the value in Table-7 of GSTR-9.
• Not due to ITC reversals: Increase the value in Table 6 of GSTR-9.

II. Differences in Total ITC Available (Excluding Imports and RCM Supplies)

(Tables 6B+6H of GSTR-9 (-) 4A(5) of GSTR-3B summary of FY 2022-23)

• Excess reported (ITC in GSTR-9 exceeds ITC in GSTR-3B): Reduce the amount from Table 6B/6H of GSTR-9 and report in Table 8C of GSTR-9.
• Short reported (ITC in GSTR-9 is less than ITC in GSTR-3B): Increase the amount in Table 6B/6H of GSTR-9.
• However, if ITC was mistakenly claimed and then reversed within the same financial year, no changes to the values are necessary.

III. Differences in Input Tax Credit Received from Input Service Distributor (ISD)

(Table 6G of GSTR-9 - Table 4A(4) of GSTR-3B summary for FY 2022-23)

• Positive difference (ITC declared for ISD in GSTR-9 is more than ITC claimed in GSTR-3B): Reduce the amount in Table 6G and increase it in Table 13 of GSTR-9.
• Negative difference (ITC declared for ISD in GSTR-9 is less than ITC claimed in GSTR-3B): Increase the amount in Table 6G of GSTR-9.

IV. Differences in ITC Reversals as per Books Compared to GSTR-3B

(Table 7(A,B,C &D)+7H of GSTR-9 (-) Table 4B in GSTR-3B)

• Positive difference (ITC reversals declared are more than ITC reversed): Reduce the amount in Table 7 of GSTR-9 and display it in Table 12 of GSTR-9.
• Negative difference (ITC reversals declared are less than ITC reversed): Increase the amount in Table 7 of GSTR-9.

V. Differences in Ineligible GST Amount Between GSTR-2A and Books

(Table 8F of GSTR-9 (-) Table 4D of GSTR-3B summary)

Positive difference:

• No change is needed if the actual amount was declared in GSTR-3B.
• Reduce the amount in Table 8F of GSTR-9 if the actual amount was not declared in GSTR-3B.

Negative difference: Report the amount in Table 8F of GSTR-9.

• Differences in GST liability declared in GSTR-1 of FY 2022-23 and paid in GSTR-3B of FY 2022-23.
• Differences in GST liability for FY 2022-23 but reported in FY 2023-24 up to the specified time.
• Differences in the value of exports and sales to SEZ (zero-rated supplies) in GSTR-3B and GSTR-1 until March 31, 2023.
• Differences in GST liability declared (GSTR-9) and paid (GSTR-3B) under reverse charge.

VI. Differences in ITC Claimed as per Books and GSTR-9

(Total ITC as per books - Table (6I-7A-7B-7C-7D-7E-7H+8C-12) of GSTR-9)

Short claimed (ITC claimed as per books is more than ITC as per draft GSTR-9):

• If the same was claimed in FY 2022-23: Report in Table 6 of GSTR-9.
• If the same was claimed in FY 2023-24 up to the specified time: Report in Tables 8C and 13 of GSTR-9.
• If the same was not claimed: Report in Table 13 of GSTR-9.

Excess claimed (ITC claimed as per books is less than ITC as per draft GSTR-9):

• If ineligible credits claimed in GSTR-3B must be reversed, indicate this in Table 7 and pay through DRC-03.
• If reversed in FY 2023-24 up to the specified time, report the reversal in Table 12 of GSTR-9.