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GST Input Tax Credit – GST ITC03 – Format, Eligibility & Rule


ITC 03 is a form that is filed in special circumstances when input tax credit that has been availed has to be reversed. If person who opted for Composition scheme this year or has any of the item on which ITC was availed become exempt even before you could utilize, they use ITC-03 to reverse the ITC.

What is GST ITC-03?

ITC 03 form is filed by a taxpayer who has to pay an amount equal to the ITC through electronic credit or cash ledger. Payments may be on the account of ITC on:

  • Input held in stock
  • Input contained in semi-finished goods or finished goods held in stock
  • Capital goods held in stock

What are the situations on which the claim is possible?

ITC-03 can be applied in two possible situations:

  • If the individual is a composition dealer and has non-availability of ITC, and in the position where the ITC has to be reversed.
  • If there are taxable goods which are exempt, and in the position where the ITC has to be reversed.

What are the prerequisites to file ITC 03?

To file ITC 03, the following conditions have to be satisfied:

  • Input tax credit should have been availed by the taxpayer earlier to reverse it using ITC 03
  • The taxpayer should intimate the department regarding opting for composition scheme in CMP-02 at the beginning of the year.
  • The taxpayer must possess a digital signature certificate (DSC) or an electronic verification code (EVC)
  • In case invoice details are not available, a certificate from a Chartered Accountant is required certifying the value of goods

What is the frequency for filing Form GST ITC-03?

Registered person can file ‘Form GST ITC-03’ only once in a financial year for opting for 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 Government.

Is there a Challan required in this process?

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

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 are issued by authorized Certifying Authorities.

  • 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 Authorized Signatory filled in part A of the Registration Application.

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.

Please find Your GST-ITC-03 Form here:FORM_GST_ITC_03

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