ITC Reporting in GSTR-9: Reporting, Reconciliations, Challenges and Clarifications

The taxpayers must carefully verify the correctness of the information being reported in the GSTR-9. The GSTR-9 annual returns once filed cannot be revised for the details reported therein. Hence, it is crucial that taxpayers ensure that all input tax credit (ITC) claims are accurately reported in the GSTR-9 return. 

In this article, we explain how to report ITC in the GSTR-9 return. Understand the tables of the GSTR-9 for ITC reporting and the best practices to reconcile any differences in ITC for the financial year. Also, note that there can be no fresh ITC claims for FY 2022-23 in the GSTR-9.

Latest Updates

4th August 2023
In the 50th GST Council meeting held on 11th July 2023, the Council recommended that the relaxations provided in FY 2021-22 in respect of various tables of the Form GSTR-9 and 9C be continued for FY 2022-23. These relaxations were notified by the CBIC on 4th August 2023 vide Notification No.38/2023.

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

Reporting Input Tax Credit in the GSTR-9

Input tax credit (ITC) claims for a financial year must be reported in the GSTR-9 return under Tables 6, 7 and 8 as follows. (To understand how to fill input tax credit details in Tables 6,7 and 8 of the GSTR-9, you can refer to our detailed guide here.)

Table 6: ITC availed during the financial year

This section contains all details of ITC availed on:

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

If there is any ITC to be claimed on account of transitional credit while adopting the GST regime, the same needs to be reported in this section as well.

(Source:GSTN)

Table 7: Details of ITC reversed and ineligible ITC for the financial year

Similar to Table 6, Table 7 also contains a break-down of ITC. However, this table contains details of ITC reversed under:

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

If there is any reversal on account of transitional credit while adopting the GST regime, the same needs to be reported in this section as well.

Table 8: Other ITC-related information

Table 8 contains ITC-related information that has not been reported in Table 6 or 7, such as:

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

Further, Tables 12 and 13 are used for reporting ITC related to the FY 2022-23 but reversed/availed in other financial years as follows:

Important Check Points for ITC Reporting

The following checkpoints must be followed by taxpayers for accurate ITC reporting in the GSTR-9:

• Reverse any ITC, being ineligible, whether temporary or permanent in nature and ensure reporting of reclaims belonging to that financial year if missed earlier. Refer to CGST Rules 37, 42, 43, etc.
• Do vendor-wise reconciliations to identify and communicate with vendors where any ITC claimed in earlier returns, now need to be reversed due to underreporting by the vendor 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 adjustments to ITC reported via debit notes or credit notes issued by vendors in FY 22-23 against purchase invoices are reported for the financial year.
• Check if the vendors have deposited the corresponding taxes with 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 towards goods/services used for business.
• File amendments pertaining to rectified information reported in the GST returns filed in a financial year.
• Compare the annual Income Tax Return (ITR) with the Annual GST Return (GSTR-9).
• Check the purchase register for 22-23 and various expense ledgers, such as bank charges, stock insurance premium accounts, etc, to look for any omissions in the GSTR-3B or adjustments. 
• Keep the purchases and input tax general ledger at par with the purchase register, except for certain exceptional line items, such as intra-company stock transfers and cross charges. 

Best Practices for ITC Reporting in the GSTR-9

Some of the best practices to file an error-free GSTR-9 are listed below:

1. Document the bifurcation of input tax credit in different ledgers as inputs, input services and capital goods in your books for easier reconciliation and reporting.
2. Businesses must keep separate documentation between inputs used for taxable and exempt supplies accurately to avoid any complexities arising in reporting. 
3. Businesses must verify the status of vendor payments at the end of 19 months from the beginning of the financial year for potential ITC reversals missed out.

I. Differences in ITC Claimed in GSTR-3B and in GSTR-9 (Table 6I of GSTR-9 - Table 6A of GSTR-9 (as per GSTR-3B of FY 2022-23).

Excess reported (ITC in draft GSTR-9 is more than ITC claimed in GSTR-3B)-

• Check if the ITC amount is wrongly reported, then reduce the amount from Table 6 of GSTR-9.
• If the ITC amount is claimed in GSTR-3B filed in FY 2023-24 upto specified time, show the differential amount under Tables 8C and 13, whereas reduce from Table 6 of draft GSTR-9.

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

• Due to wrong 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 (other than imports and inward supplies liable to RCM) (Tables 6B+6H of GSTR-9 (-) 4A(5) of GSTR-3B summary of FY 2022-23)

• Excess reported (ITC in GSTR-9 is more than ITC in GSTR-3B), then 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), then increase the amount in Table 6B/6H of GSTR-9.
• However, if ITC was wrongly claimed and reversed in the same financial year, then there is no need to change the values.

III. Differences in input tax credit received from 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 in Table 6G and increase 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 as 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 show 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 GST amount shown as ineligible between GSTR-2A and books (Table 8F of GSTR-9 (-) Table 4D of GSTR-3B summary)

Positive difference- 

• No need to change 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 of 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 upto specified time.
• Differences in the value of exports and sales to SEZ (zero-rated supplies) in GSTR-3B and GSTR-1 till 31st Mar'23.
• 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)-

• Whether the same was claimed in FY 2022-23: Report in Table 6 of GSTR-9.
• Whether the same was claimed in FY 2023-24 upto specified time: Report in Tables 8C and 13 of GSTR-9.
• Whether 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, show this in Table 7 and pay it through DRC-03.
• If reversed in FY 2023-24 upto specified time, report the reversal in Table 12 of GSTR-9. 

How does Clear Help in Accurate and Faster GSTR-9 Filing

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