GST Advisory on ITC Reversal & RCM Statements

Dec 29th, 2025

1. To ensure that reversed and re-claimed Input Tax Credit (ITC) is reported correctly and to minimise manual mistakes, the GST portal introduced the Electronic Credit Reversal and Re-claimed Statement, commonly known as the Reclaim Ledger. This statement is applicable from the August 2023 return period for monthly taxpayers and from the July–September 2023 quarter for quarterly taxpayers.

2. The Reclaim Ledger records ITC that is temporarily reversed in Table 4(B)(2) and later re-claimed in Table 4(A)(5) and Table 4(D)(1) of GSTR-3B.

3. At present, if a taxpayer tries to re-claim more ITC in Table 4(D)(1) than what is available in the reversal balance, the system shows a warning message. However, the taxpayer is still allowed to file Form GSTR-3B.

4. Taxpayers have been given multiple opportunities to declare their opening balance of ITC that was reversed earlier but not re-claimed at that time, in the newly introduced Reclaim Ledger.

5. The Electronic Credit Reversal and Re-claimed Statement can be viewed by going to:
Dashboard › Services › Ledger › Electronic Credit Reversal and Re-claimed

6. To help taxpayers correctly report transactions under the Reverse Charge Mechanism (RCM), another statement called the RCM Liability/ITC Statement (RCM Ledger) was introduced on the GST portal. This applies from August 2024 for monthly filers and from the July–September 2024 quarter for quarterly filers.

The RCM Ledger records:

• RCM tax liability reported in Table 3.1(d) of GSTR-3B, and
  
  
• Related ITC claimed in Table 4(A)(2) and Table 4(A)(3) for each return period.

7. A warning message is shown if the ITC claimed in Table 4(A)(2) and Table 4(A)(3) is more than the closing balance of the RCM Ledger plus the RCM liability reported in Table 3.1(d).

8. Taxpayers have also been given multiple chances to report and amend the opening balance of RCM ITC in both statements. Any excess ITC reversal or excess RCM liability/ITC related to periods before these statements were introduced can be declared as opening balance.

9. The RCM Liability/ITC Statement can be accessed through:
Dashboard › Services › Ledger › RCM Liability/ITC Statement

10. Taxpayers are now informed that soon the system will not allow negative balances or excess ITC claims beyond the available balance in either ledger. The following validations will be applied to control ITC usage:

a. The ITC re-claimed in Table 4(D)(1) must be equal to or less than the total of:

• Closing balance of the Reclaim Ledger, and
  
  
• ITC reversed in Table 4(B)(2) of the current GSTR-3B.
  

b. The RCM ITC claimed in Table 4(A)(2) and Table 4(A)(3) must be equal to or less than the total of:

• RCM tax paid in Table 3.1(d) of the same return, and
  
  
• Closing balance of the RCM Ledger.

11. If a taxpayer already has a negative closing balance in the Reclaim Ledger or the RCM Ledger, the system will not allow filing of GSTR-3B until the following actions are taken:

a. For a negative balance in the Reclaim Ledger, the taxpayer must reverse the excess ITC by reporting it in Table 4(B)(2) of the current GSTR-3B. If there is no ITC available in the current period, the reversed amount will be added to the tax liability while filing the return.

b. For a negative balance in the RCM Ledger, the taxpayer must either:

• Pay additional RCM tax equal to the negative balance in Table 3.1(d), or
  
  
• Reduce the ITC claimed in Table 4(A)(2) or 4(A)(3) to the allowed amount in the current return.

For more details on the Electronic Credit Reversal and Re-claimed Statement, taxpayers may refer to the GSTN advisory dated 17 September 2024. A detailed advisory on the RCM Liability/ITC Statement is also available on the GST portal through the links provided in the official advisory.

Frequently Asked Questions on ITC Reversal, Re-claim and RCM Ledger

1. How can I check my Electronic Credit Reversal and Re-claimed Statement?

You can view this statement by following this path on the GST portal:
Dashboard › Services › Ledger › Electronic Credit Reversal and Re-claimed Statement

2. How can I check my RCM Liability/ITC Statement?

To view the RCM Liability/ITC Statement, go to:
Dashboard › Services › Ledger › RCM Liability/ITC Statement

3. What changes will apply in GSTR-3B for the Electronic Credit Reversal and Re-claimed Statement?

Soon, the system will not allow filing of GSTR-3B if the ITC claimed in Table 4(D)(1) is more than:

• The closing balance available in the Reclaim Ledger, and
  
  
• The ITC reversed in Table 4(B)(2) of the current return period (combined).

4. How can I file GSTR-3B if the closing balance of the ITC Reclaim Ledger is already negative?

A negative closing balance means excess ITC was re-claimed earlier.

To file GSTR-3B:

• Reverse the excess ITC in Table 4(B)(2) of the current return, up to the negative balance amount.
  
  
• This correction will allow you to file the return.

If no ITC is available in the current period, the reversed amount will be added to your tax liability.

Example:
If the closing balance of the Reclaim Ledger is –₹10,000, you must reverse ₹10,000 in Table 4(B)(2) to file GSTR-3B.

5. How will system validation work in GSTR-3B for the RCM Liability/ITC Statement?

Taxpayers will not be able to file GSTR-3B if the RCM ITC claimed in Table 4(A)(2) or 4(A)(3) is more than:

• The available balance in the RCM Ledger, plus
  
  
• RCM liability reported in Table 3.1(d) of the current return.

6. How can I file GSTR-3B if the closing balance of the RCM Liability/ITC Statement is negative?

A negative balance means excess RCM ITC was claimed earlier.

To file the return, you must either:

• Pay additional RCM tax equal to the negative balance in Table 3.1(d), or
  
  
• Reduce the RCM ITC claimed in Table 4(A)(2) or 4(A)(3) by the negative balance amount, if sufficient ITC is available.

Example:
If the RCM Ledger shows –₹5,000, you can either:

• Pay ₹5,000 as RCM liability, or
  
  
• Reduce ₹5,000 from RCM ITC claimed.

After making the correction, you can proceed with filing GSTR-3B.

Official Government References

• GST Advisory No. 643:
  https://www.gst.gov.in/newsandupdates/read/643
• Advisory on ITC Reversal & Re-claimed Statement:
  https://tutorial.gst.gov.in/downloads/news/itc_pending_ledger.pdf
• Advisory on RCM Liability/ITC Statement:
  https://services.gst.gov.in/services/advisoryandreleases/read/514

Conclusion

The introduction of ITC Reclaim Ledger and RCM Ledger marks a major step towards controlled and error-free GST credit usage. Taxpayers should regularly review these statements, correct negative balances early, and align their GSTR-3B filing accordingly to avoid future return blocks.