ITC Reverse

ITC Reversal means the credit of inputs utilized earlier would now be added to the output tax liability, effectively nullifying the credit claimed earlier. This means that If the input tax credit is wrongly claimed, then it should be reversed by making the payment to that extent next month. Depending upon when a such reversal is done, payment of interest may also be required.

The ITC is required to be reversed under various cases defined in the Act. Some of those cases are below:

• The recipient fails to pay consideration to the supplier (whether fully or partly) for a particular supply
• The supplier fails to pay tax through GSTR-3B by 30th September of the following year

ITC Reversal Tool in InvoiceNET® Lite is a tool to handle ITC vouchers in an easy way. Using this, Users can view pending ITC reversal vouchers and can transfer ITC reversal entries by single or bulk.

Step 1

• Click Transactions=>GST Tools=>ITC Reversal to handle ITC reversal as shown in Step 1 figure

• Now ITC Reversal window appears as shown in Step 2 figure

Step 3

•  In the header panel,  there are 4 comb boxes available to select the RCM criteria.
  •  ITCR Method=> ITCR method to be searched. An available option is ITC Reversal
  • Date Begin=> Start Date of the period to search ITCR vouchers
  • Date End=> End Date of the period to search ITCR vouchers
  • Status=>Status of the RCM Transfer vouchers to be searched. Available status options are All / Pending / Posted
• After selecting the criteria, click on the Run button to apply the filter.
• As soon as the run button is clicked, ITCR transaction details will be displayed in the grid as shown in the Step 4 figure.
• User can view Voucher details / Transferred  voucher details by right-clicking on a specific row in that grid
• To transfer ITC Reversal entry, select the check box located at the start of each row and then click on the start button. Multi-select can also be supported.  To select all rows, put a tick on  select all check box available at the bottom of the grid

•  Once the start button is clicked, the tool will post ITC Reversal journal entries for selected vouchers.