FAQs on Form GST ITC-03!

Navigating the Goods and Services Tax (GST) system in India involves understanding various compliance forms, and Form GST ITC-03 is one such crucial document. This form becomes relevant when a taxpayer opts for the composition scheme or when their outward supplies become wholly exempt. In this blog, we break down the most frequently asked questions about Form GST ITC-03—helping you understand its purpose, filing requirements, payment process, and post-filing implications simply and clearly.

FAQs> Form GST ITC-03

1. What is Form GST ITC-03?

Form GST ITC-03 is to be filled up by those taxpayers who opt for a composition scheme or where goods or services or both supplied by the taxpayer become wholly exempt. This form is to be filed by taxpayers, to pay an amount, by way of debit in the electronic credit ledger or electronic cash ledger, equivalent to credit availed in respect of:

• Inputs held in stock, and

• Inputs contained in semi-finished goods or finished goods held in stock, and

• Capital goods or plant and machinery

2. When filing of Form GST ITC-03 is needed for a taxpayer?

In the following conditions, the taxpayer must file Form GST ITC-03:

• Taxpayer has opted for a composition scheme or goods or services or both supplied by a taxpayer becomes wholly exempt.

• Taxpayer has availed ITC in respect of input held in stock and input contained in semi-finished goods or finished goods held in stock and on capital goods or plant and machinery.

3. From where can I as a taxpayer file Form GST ITC-03?

Form GST ITC-03 can be accessed on the GST Portal, post login by the taxpayer.

The path is Services > Returns > ITC Forms.

4. What is the frequency of filing Form GST ITC-03?

Registered persons can file ‘Form GST ITC-03’ only once in a financial year for opting for a composition scheme. For reversal/payment of tax in case of exemption of supplies, it can be filed multiple times, as and when notifications exempting such supplies are issued by the Government.

5. Can I preview the Form GST ITC-03 before filing?

Yes, you can preview the Form GST ITC-03 before filing it on the GST Portal.

6. What is the MAKE PAYMENT button for? What happens when the MAKE PAYMENT button is clicked? 

MAKE PAYMENT button is clicked to pay off the liabilities, computed based on details declared by the taxpayer. Once you click the MAKE PAYMENT button, liabilities are paid off and you cannot make any changes to Form GST ITC-03.

7. Why do I need to create a Challan?

If the available cash balance in the Electronic Cash Ledger is less than the amount required to offset the liabilities; additional cash is required to pay the liabilities. You need to create the challan for that additional cash required, to offset the liabilities.

8. GST Portal has auto-populated the “Tax to be paid through ITC” fields. Can I edit the amount for ITC utilization?

“Tax to be paid through ITC” fields show optimum credit utilization amounts by the GST Portal, based on provisions of the law/rules relating to credit utilization. However, you may edit the ITC utilization. As you change ITC utilization, the cash to be paid by you will also change.

9. What are the modes of signing Form GST ITC-03?

You can file Form GST ITC-03 using DSC, or EVC. 

Digital Signature Certificate (DSC)

Digital Signature Certificates (DSC) are the digital equivalent (that is electronic format) of physical or paper certificates. A digital certificate can be presented electronically to prove one’s identity, to access information or services on the Internet, or to sign certain documents digitally. In India, DSC is issued by authorized Certifying Authorities.

The GST Portal accepts only PAN-based Class II and III DSC. 

Electronic Verification Code (EVC)

The Electronic Verification Code (EVC) authenticates the identity of the user at the GST Portal by generating an OTP. The OTP is sent to the mobile phone number of the registered mobile phone of the Authorized Signatory filled in part A of the Registration Application.

10. What happens after Form GST ITC-03 is filed?

After Form GST ITC-03 is filed:

• ARN will be generated in the GST portal and the same will be communicated to Taxpayer by SMS and E-mail, on their registered mobile number and e-mail id respectively.

• Balance of credit lying in Electronic Credit Ledger will lapse on filing of this form, after ITC reversal /payment of tax, in case of Opt-in for composition scheme.

Filing Nil Form GST ITC-03 

11. Can I file Nil Form GST ITC-03?

Yes, you can file Nil Form GST ITC-03.

12. When can I file Nil Form GST ITC-03?

You can file Nil Form GST ITC-03 if you have -

(a) No stock of inputs or inputs contained in semi-finished and finished goods or capital goods on the day immediately preceding the day on which the composition scheme has been completed; or

(b) The stock of inputs or inputs contained in semi-finished and finished goods or capital goods on the day immediately preceding the day on which the composition scheme has commenced but you have not claimed an input tax credit (ITC) on the same.

13. From where can I as a taxpayer file Nil Form GST ITC-03?

You can preview and file Nil Form GST ITC-03 by navigating to Services > Returns > ITC Forms option.

Note: You can preview Nil Form GST ITC-03 before filing.

14. What are the modes of signing Nil Form GST ITC-03?

You can file Nil Form GST ITC-03 using DSC or EVC.

Note: Filling using DSC is mandatory for the class of taxpayers (Companies etc.) as specified in the rules.

15. What happens after Nil Form GST ITC-03 is filed?

After Nil Form GST ITC-03 is filed, ARN will be generated in the GST Portal and the same will be communicated to taxpayers by SMS and E-mail, on their registered mobile number and e-mail ID respectively. 

Conclusion

Form GST ITC-03 plays a significant role in ensuring the proper reversal of Input Tax Credit (ITC) when transitioning to the composition scheme or facing exemption scenarios. Knowing when and how to file it correctly helps taxpayers stay compliant and avoid penalties. Whether you are filing a regular or Nil return, being well-informed about the process can simplify your GST journey. Keep this FAQ guide handy for quick reference whenever you're required to deal with Form GST ITC-03.

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