Circular No. 170/02/2022-GST
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F.No. CBIC-20001/2/2022-GST
Government of India
Ministry of Finance
Department of Revenue
Central Board of Indirect Taxes and Customs
GST Policy Wing
New Delhi, Dated the 6th July, 2022
To,
The Principal Chief Commissioners/Chief Commissioners/Principal Commissioners/
Commissioners of Central Tax (All)
The Principal Directors General/Directors General (All)
Madam/Sir,
Subject: Mandatory furnishing of correct and proper information of inter-State supplies
and amount of ineligible/blocked Input Tax Credit and reversal thereof in return in
FORM GSTR-3B and statement in FORM GSTR-1 –reg.
The process of return filing has been simplified over a period of time. With effect from
December 2020, FORM GSTR-3B is getting auto-generated on the portal by way of auto-
population of input tax credit (ITC) from FORM GSTR-2B (auto-generated inward supply
statement) and auto-population of liabilities from FORM GSTR-1 (Outward supply
statement), with an editing facility to the registered person. However, it has been observed
that there still are some infirmities in information being furnished by the registered person in
relation to inter-State supplies effected to unregistered person, registered person paying tax
under section 10 of the Central Goods and Services Tax Act, 2017 (composition taxable
persons) and UIN holders. Also, there appears to be lack of clarity regarding reporting of
information about reversal of Input Tax Credit (hereinafter referred to as the “ITC”) as well
as ineligible ITC in Table 4 of FORM GSTR-3B.
2.
It is desirable that correct reporting of information is done by the registered person in
FORM GSTR-3B and FORM GSTR-1 so as to ensure correct accountal and accurate
settlement of funds between the Central and State Governments. Accordingly, in order to
ensure uniformity in return filing, the Board, in exercise of its powers conferred under sub-
section (1) of section 168 of the Central Goods and Services Tax Act, 2017 (hereinafter
referred to as the “CGST Act”), hereby clarifies various issues in succeeding paragraphs.
3.
Furnishing of information regarding inter-State supplies made to unregistered
persons, composition taxable persons and UIN holders:
3.1
It has been noticed that a number of registered persons are not reporting the correct
details of inter-State supplies made to unregistered persons, to registered person paying tax
Circular No. 170/02/2022-GST
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under section 10 of the CGST Act (composition taxable persons) and to UIN holders, as
required to be declared in Table 3.2 of FORM GSTR-3B, under the notion that the taxable
value of the same along with tax payable has already been reported in Table 3.1 of the said
FORM. In certain cases, it has also been noticed that the address of unregistered person are
captured incorrectly by the supplier, especially those belonging to banking, insurance, finance,
stock broking, telecom, digital payment facilitators, OTT platform services providers and E-
commerce operators, leading to wrong declaration of Place of Supply (PoS) in both the
invoices issued under section 31 of the CGST Act, as well as in Table 3.2 of FORM GSTR-
3B.
3.2
In this context, it may be noted that the information sought in Table 3.2 of FORM
GSTR-3B is required to be furnished, place of supply-wise, even though the details of said
supplies are already part of the supplies declared in Table 3.1 of the said FORM. For assisting
the registered persons, Table 3.2 of FORM GSTR-3B is being auto-populated on the portal
based on the details furnished by them in their FORM GSTR-1.
3.3
Accordingly, it is hereby advised that the registered persons making inter-State
supplies –
(i) to the unregistered persons, shall also report the details of such supplies, place of
supply-wise, in Table 3.2 of FORM GSTR-3B and Table 7B or Table 5 or Table 9/10
of FORM GSTR-1, as the case may be;
(ii) to the registered persons paying tax under section 10 of the SGST/CGST Act
(composition taxable persons) and to UIN holders, shall also report the details of such
supplies, place of supply-wise, in Table 3.2 of FORM GSTR-3B and Table 4A or 4C
or 9 of FORM GSTR-1, as the case may be, as mandated by the law.
(iii) shall update their customer database properly with correct State name and ensure
that correct PoS is declared in the tax invoice and in Table 3.2 of FORM GSTR-3B
while filing their return, so that tax reaches the Consumption State as per the principles
of destination-based taxation system.
3.4
It is further advised that any amendment carried out in Table 9 or Table 10 of FORM
GSTR-1 or any entry in Table 11 of FORM GSTR-1 relating to such supplies should also be
given effect to while reporting the figures in Table 3.2 of FORM GSTR-3B.
4. Furnishing of information regarding ITC availed, reversal thereof and ineligible ITC
in Table 4 of GSTR-3B
4.1
Table 4(A) of the FORM GSTR-3B is getting auto-populated from various entries of
FORM GSTR-2B. However, various reversals of ITC on account of rule 42 and 43 of the
CGST Rules or for any other reasons are required to be made by the registered person, on his
own ascertainment, in Table 4(B) of the said FORM. It has been observed that different
practices are being followed to report ineligible ITC as well as various reversals of ITC in
FORM GSTR-3B.
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4.2
It may be noted that the amount of Net ITC Available as per Table 4(C) of FORM
GSTR-3B gets credited into the electronic credit ledger (ECL) of the registered person.
Therefore, it is important that any reversal of ITC or any ITC which is ineligible under
any provision of the CGST Act should not be part of Net ITC Available in Table 4(C)
and accordingly, should not get credited into the ECL of the registered person.
4.3
In this context, it is pertinent to mention that the facility of static month-wise auto-
drafted statement in FORM GSTR-2B for all registered persons has been introduced from
August, 2020. The statement provides invoice-wise total details of ITC available to the
registered person including the details of the ITC on account of import of goods. Further,
details of the said statement are auto-populated in Table 4 of return in FORM GSTR-3B
which are editable in the hands of registered person. It may be noted that the entire set of
data that is available in FORM GSTR-2B is carried to the table 4 in FORM GSTR-3B,
except for the details regarding ITC that is not available to the registered person either
on account of limitation of time period as delineated in sub-section (4) of section 16 of
the CGST Act or where the recipient of an intra-State supply is located in a different
State / UT than that of place of supply. It is pertinent to mention that the ineligible ITC,
which was earlier not part of calculation of eligible/available ITC, is now part of calculation
of eligible/available ITC in view of auto-population of Table 4(A) of FORM GTSR-3B from
various tables of FORM GTSR-2B. Thereafter, the registered person is required to identify
ineligible ITC as well as the reversal of ITC to arrive at the Net ITC available, which is to be
credited to the ECL. In light of the above, the procedure to be followed by registered person
is being detailed hereunder for correct reporting of information in the return:
