Table 4 of GSTR-3B Explained

Table 4 of GSTR-3B plays a crucial role in GST compliance as it captures all details related to Input Tax Credit (ITC) for a tax period. Understanding this table is important because it directly impacts the net tax liability of a registered taxpayer. With changes introduced from August 2022, reporting under Table 4 of GSTR-3B has become more detailed and structured.

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What Table 4 of GSTR-3B Covers

Table 4 of GSTR-3B reports the total ITC available, ITC reversed, and the final eligible credit. The data mainly comes from GSTR-2B, which auto-populates the total ITC figure. This includes credit on imports, inward supplies under reverse charge, capital goods, and ITC received from Input Service Distributors.

Break-up Under the New Format

The updated table is split into four sections. Table 4(A) shows the total input tax credit taken from GSTR-2B. Table 4(B) is used to show ITC that needs to be reversed. This reversal can be of two types. Permanent reversals are credits that cannot be taken again. Temporary reversals are credits that can be claimed later when the required conditions are fulfilled. Table 4(C) shows the final ITC available after all deductions. Table 4(D) is used to report ITC that is not allowed by law, such as credit blocked due to time limits or place of supply rules.

How to Report ITC Correctly

Before filing the return, taxpayers should clearly separate allowed and not-allowed ITC. Permanent reversals must be reported correctly to avoid claiming extra credit. Temporary reversals should be tracked properly so they can be claimed later. If any ITC is reclaimed, it should be reported in the correct section of the return.

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Impact on Taxpayers

The new reporting structure under Table 4 of GSTR-3B requires better record-keeping and regular reconciliation with purchase records. Accurate reporting reduces the risk of notices and penalties. When done correctly, it ensures compliance and smooth credit flow under GST.

A clear understanding of Table 4 of GSTR-3B helps taxpayers stay compliant and avoid common filing errors.