Table 7 of GSTR-9 – Detail of ITC Reversed and Ineligible ITC for the financial year 2020-21

Table 7 of GSTR-9 requires the information of reversal of eligible Input Tax Credit (ITC) and details of ineligible ITC for the financial year 2020-21.

In the table, following rules/sections are specified for reversal:

Reversal –

1. As per Rule 37
2. As per Rule 39
3. As per Rule 42
4. As per Rule 43
5. As per Section 17(5)
6. Reversal of TRAN-I credit
7. Reversal of TRAN-II credit
8. Other reversals (please specify)

The instruction to fill up this table is given in GSTR-9, the same is reproduced below for reference:

“Details of input tax credit reversed due to ineligibility or reversals required under rule 37, 39, 42 and 43 of the CGST Rules, 2017 shall be declared here. This column should also contain details of any input tax credit reversed under section 17(5) of the CGST Act, 2017 and details of ineligible transitional credit claimed under FORM GST TRAN-I or FORM GST TRAN-II and then subsequently reversed. Table 4(B) of FORM GSTR-3B may be used for filling up this detail. Any ITC reversed through FORM ITC-03 shall be declared in 7H. If the amount stated in Table 4D of FORM GSTR-3B was not included in table 4A of FORM GSTR-3B, then no entry should be made in table 7E of FORM GSTR-9. However, if amount mentioned in table 4D of FORM GSTR-3B was included in table 4A of FORM GSTR-3B, then entry will come in 7E of FORM GSTR-9.”

The above mentioned rules are discussed below:

Rule 37 of CGST Rules, 2017 provides for the ‘Reversal of input tax credit in the case of non-payment of consideration.’

As per Section 16(2) a recipient shall pay to the supplier, the value of supply along with tax payable thereon within a period of 180 days from the date of issue of invoice by the supplier. If the recipient fails to pay to the supplier then an amount equal to the input tax credit availed by him shall be reversed. The information of such reversal is required to be furnished in table 7(A) of GSTR-9.

Rule 39 provides for the ‘procedure for distribution of input tax credit by Input Service Distributor.  An input service distributor distributes the input tax credit on the common expenses incurred by Head office or regional officer registered as an input service distributor to the branches of the same company having same PAN (Permanent Account Number) in other State. In case the credit was incorrectly distributed then an input service distributor shall raise credit note to reverse the excess distributed input tax credit. The information of such reversal is required to be furnished in table 7(B) of GSTR-9.

Rule 42 provides for the ‘Manner of determination of input tax credit in respect of inputs or input services and reversal thereof’. This rule provides that if the input tax credit is claimed on such input or input services which attract the provision of Sec. 17(1) or Sec. 17(2), being partly used for the purposes of business and partly for other purposes, or partly used for affecting taxable supplies including zero rated supplies and partly for effecting exempt supplies, then input tax credit attributed to the purposes of business or for affecting taxable supplies shall be eligible to be claimed and balance to be reversed. The information of such reversal in required to be reported in table 7(C) of GSTR-9.

Rule 43 provides for the ‘manner of determination of input tax credit in respect of capital goods and reversal thereof in certain cases’.  This rule provides that if the input tax credit in respect of capital goods, which attract the provision of Sec.17(1) or Sec.17(2), being partly used for the purposes of business and partly for other purposes, or partly used for affecting taxable supplies including zero rated supplies and partly for effecting exempted supplies, then input tax credit attributed to the purposes of business or for effecting taxable supplies shall be eligible to be claimed and balance to be reversed. The information of such reversal in required to be reported in table 7(D) of GSTR-9.

Section 17 provides for the ‘Apportionment of credit and blocked credits.’ Sub-section (5) of Sec. 17 provides the list of items on which the input tax credit shall not be available to the recipient. For e.g. motor vehicle used for transportation of persons having seating capacity of up to 13 persons including the drivers is not eligible for input tax credit claim. However, if the motor vehicle is used for making taxable supplies namely – A) further supply of such motor vehicles or B) transportation of passengers or C) imparting training on driving such motor vehicle, the input tax credit is eligible. Likewise there are other items mentioned in this section on which input tax credit is not eligible. Refer Sec.17(5) for full list. The information of reversal of input tax credit under this sub-section is required to be furnished in table 7(E) of GSTR-9.     

REVERSAL of TRAN-I credit – The transitional credit is the credit eligible under erstwhile tax regime and carry forwarded to GST regime by filing FORM GST TRAN-I. In the process if any ineligible credit was wrongly carry forwarded in GST, then such excess credit has to be reversed. The information of such reversal is required to be reported in table 7(F) of GSTR-9.

REVERSAL of TRAN-II credit – As per the condition of claiming transitional credit certain credits was to be claimed in GST by filing FORM GST TRAN-II . In case any error was committed and excess input tax credit was claimed then the credit has to be reversed. The information of reversal of such ineligible credit is required to be reported in table 7(G) of GSTR-9.

Other reversal s (please specify)  – Any ITC reversed through FORM ITC-03 shall be declared in this table 7H of GSTR-9.

The above table 7A, 7B, 7C, 7D, 7E, 7F, 7G and 7H was optional for filing for FY. 2017-18, 2018-19 and 2019-20. Now, the said tables are also optional for filing for F.Y. 2020-21. So a taxpayer filing GSTR-9 can skip working on these tables.

Due date of filing GSTR-9/9C for FY 2020-21 is 31.12.2021, 5 days left, so need to speed up the task and file return on or before 31.12.2021.

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