GST compliance is becoming more system-driven every year. The GST Portal now uses automated ledgers and validations to ensure that Input Tax Credit (ITC) is claimed correctly and only when eligible. Two important statements introduced by GSTN, the Electronic Credit Reversal and Re-claimed Statement and the RCM Liability/ITC Statement, directly affect the filing of GSTR-3B.
For many businesses, these changes can appear technical and confusing. This is why guidance from a professional GST consultant in Gurgaon is often helpful to ensure error-free compliance and uninterrupted return filing.
Why These New GST Statements Were Introduced
Earlier, GST returns allowed ITC reversals, re-claims, and RCM credits to be reported manually in GSTR-3B. Due to this, many taxpayers unintentionally claimed excess ITC or reclaimed credit without reversing it earlier. GST authorities noticed frequent mismatches during audits and assessments.
To reduce such errors and improve transparency, GSTN introduced electronic statements that automatically track ITC movement and RCM tax payment. These statements now act as control mechanisms and will soon become mandatory checks before allowing GSTR-3B filing.
Electronic Credit Reversal and Re-claimed Statement
The Electronic Credit Reversal and Re-claimed Statement, also known as the ITC Reclaim Ledger, was introduced from August 2023 for monthly taxpayers and from the July–September 2023 quarter for quarterly taxpayers. This statement tracks ITC that is temporarily reversed and later reclaimed.
Under GST law, ITC may need to be reversed for reasons such as delayed payment to suppliers or provisional credit claimed earlier. Once the required conditions are fulfilled, the same ITC can be reclaimed. The reclaim ledger ensures that such re-claims are linked to actual reversals, preventing excess credit claims.
How ITC Is Tracked in the Reclaim Ledger
The GST system records ITC reversals reported in Table 4(B)(2) of GSTR-3B and matches them with ITC reclaimed in Table 4(A)(5) and Table 4(D)(1). At present, if a taxpayer attempts to reclaim more ITC than available in the ledger, the system issues a warning but still allows return filing.
However, this facility will soon be withdrawn. Once strict validation is implemented, GSTR-3B filing will be blocked if excess ITC is reclaimed. Businesses often rely on a GST consultant in Gurgaon to regularly review this ledger and avoid future compliance issues.
Viewing the ITC Reclaim Ledger on GST Portal
Taxpayers can view their Electronic Credit Reversal and Re-claimed Statement by logging into the GST Portal and navigating to Dashboard → Services → Ledger → Electronic Credit Reversal and Re-claimed. Regular review of this statement is now essential, especially before filing GSTR-3B.
Introduction to RCM Liability/ITC Statement
The RCM Liability/ITC Statement was introduced from August 2024 for monthly filers and from the July–September 2024 quarter for quarterly filers. This statement focuses on Reverse Charge Mechanism (RCM) transactions, where tax is paid by the recipient instead of the supplier.
GST law allows ITC on RCM supplies only after the tax has been paid in cash. The RCM ledger ensures that ITC is claimed strictly against tax actually paid under RCM.
How RCM Transactions Are Tracked
The RCM ledger captures tax liability reported in Table 3.1(d) of GSTR-3B and matches it with ITC claimed in Table 4(A)(2) and Table 4(A)(3). If a taxpayer claims more RCM ITC than the tax paid, the system shows a warning message.
Currently, return filing is allowed despite the warning. However, once validations are enforced, GSTR-3B filing will be restricted if RCM ITC exceeds the permitted amount. Businesses dealing with frequent RCM transactions should closely monitor this ledger or consult a GST consultant in Gurgaon for accurate reporting.
Upcoming GST Validations You Must Be Aware Of
GSTN has announced that negative balances and excess ITC claims in both ledgers will soon not be permitted. This means ITC reclaimed must always be within the available balance of reversed ITC plus current reversals. Similarly, RCM ITC claimed must be within the tax paid under RCM along with the available ledger balance.
Once these validations are activated, the GST system will automatically block GSTR-3B filing if discrepancies are found.
What If Your Ledger Shows a Negative Balance?
A negative balance in the ITC Reclaim Ledger means excess ITC was reclaimed in earlier periods. To correct this, the taxpayer must reverse the excess ITC in the current return. If there is no ITC available, the reversed amount will be added to the tax payable.
A negative balance in the RCM ledger indicates excess RCM ITC claimed earlier. In such cases, the taxpayer must either pay additional RCM tax or reduce ITC claimed in the current return. Only after correcting the imbalance will the system allow GSTR-3B filing.
Why Professional GST Support Is Important
With GST moving towards automated compliance, even small errors can lead to blocked returns, additional tax liability, and interest exposure. Regular reconciliation of ITC and RCM ledgers has become essential for smooth operations.
Engaging an experienced GST consultant in Gurgaon helps businesses stay compliant, avoid system-level errors, and manage GST filings efficiently without last-minute stress.
Final Words
The Electronic Credit Reversal and Re-claimed Statement and the RCM Liability/ITC Statement represent a major shift in GST compliance. These ledgers are no longer informational tools but critical compliance checks that directly impact GSTR-3B filing.
Businesses must now focus on timely reconciliation, accurate reporting, and proactive corrections. With proper planning and professional guidance, GST compliance can remain smooth and risk-free in this evolving regulatory environment.
