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ITC reversals mode

Shiv Karwa (221 Points)

06 October 2024

by mistake we claim input of vehicle in March 2022.
now which way is better for reversal
through 3b or drc03

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Rama chary Rachakonda (Master in Accounts & high court Advocate email ID:ramachary64@gmail.com voice no:9989324294) (7352 Points)
Replied 07 October 2024

If you've mistakenly claimed input tax credit (ITC) on a vehicle in March 2022, you'll need to reverse it. You have two options: filing Form 3B (GST Return) or DRC-03 (Declaration for Reversal of ITC). Here's a brief comparison of both options: *Form 3B (GST Return):* - You can reverse the ITC in the next filing period (e.g., April 2022 or subsequent months). - You'll need to report the reversal in the "Input Tax Credit" section of the return. - This option is suitable if you're already filing regular GST returns. *DRC-03 (Declaration for Reversal of ITC):* - This form is specifically designed for reversing ITC. - You can file it separately, without waiting for the next GST return filing period. - You'll need to provide details of the original ITC claim and the reasons for reversal. Consider the following factors to decide between the two options: - Urgency: If you want to reverse the ITC quickly, DRC-03 might be a better option. - Complexity: If you're comfortable with GST returns and want to report the reversal in the regular return, Form 3B might be easier. - Documentation: Ensure you maintain proper documentation for either option, as the department may request supporting documents.

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