How to File GST ITC-03 Form?

Have you claimed ITC but opted for a composition scheme or the goods or services supplied by you is now fully exempt? Now you are clueless about how to reverse the ITC? So, the key to reverse the claimed ITC is in GST ITC-03 form, and in this blog, we will know how you can file the GST ITC-03 form.

What is GST ITC-03 Form?

The ITC-03 is an ITC reversal form that is available to taxpayers who have claimed an input tax credit (ITC) and have chosen the composition scheme, or whose goods or services, or both, are completely exempt.

What are the Pre-Requisites to file GST ITC-03 Form?

1. The taxpayer has submitted Form GST CMP-02 to opt for the composition scheme, or the government has issued a notification full exempting any goods or services (or both) supplied by the taxpayer.
2. A taxpayer has availed ITC on Inputs held in stock, inputs contained in semi-finished or finished items held in stock, and capital goods held in stock.

When to file GST ITC-03 Form?

If a taxpayer is filing ITC 03 because he has chosen the composition scheme, he should only do so once every fiscal year. This is because, once he chooses a composition scheme at the start of the fiscal year, he cannot change it until the next fiscal year.

GST ITC-03 form must be submitted within 60 days of the start of the fiscal year. If CMP 02 was submitted before March 31, 2021, ITC 03 must be submitted within 180 days of the scheme’s start date. If a taxpayer is filing ITC 03 due to the exemption of goods or/and services, he should do so as soon as the notifications are given.

What Information Should be Included in Form GST ITC-03?

The taxpayer needs to fill the following information in the GST PMT-03 Form:

1. GSTIN
2. Legal name and Trade name
3. Information about a request for a composition scheme.
4. The effective date of the exemption
5. Information on ITC claims for inputs kept in inventory (where the invoice is available)
6. Information on input tax credits claimed on semi-finished and finished products kept in inventory (where the invoice is available)
7. Information on ITC claims for capital items in stock (where the invoice is available)
8. Information on ITC claims for inputs held in stock as well as semi-finished and finished items held in stock (where the invoice is not available)
9. Information on ITC claims for capital items in stock (where the invoice is not available)
10. The entire liability of ITC payable (to be reversed) and being paid off with the amount available in the e-Cash Ledger or e-Credit Ledger.
11. If the option for composition scheme is selected, the credit amount in the e-Credit Ledger will lapse upon submission of this form, after ITC reversal/payment of tax.

How to File GST ITC-03 Form?

To file the GST ITC-03 Form you need to follow the below-mentioned steps:

Step-1: Log in to the GST Portal with valid credentials
Step-2: Choose Services > Returns > ITC FORMS > ITC-03 from the Services menu.
Step 3: Choose whether to prepare your return “online” or “offline.”
Step 4: Select the relevant choice from the > Section menu:

1. Section 18(4) (a) – This section applies to taxpayers who choose to participate in the composition system. It can only be filed once each fiscal year.
2. Section 18(4) (b) – this section applies to taxpayers whose goods or/and services are exempt. It might be filed numerous times depending on when the exemption notification is granted.

Step 5: Fill the information in 4 different tiles accordingly:

1. Details of goods with invoices and
2. Details of goods without invoices
3. Amount of ITC Payable or Paid
4. Debit Entries in cash or credit ledger for payment of tax

Step 6: Upload information about the certificate issued by Chartered Accountant or Cost Accountant.

1. Name of the CA certifying the form
2. CA’s Membership Number
3. Name of the CA firm
4. Date of certificate issuance

Step 7: After completing the final payment, the form must be validated either by using DSC or EVC.

Step 8: Download the filed GST ITC-03 for future reference.

Consequences of Not Filing GST ITC-03

If a composition dealer fails to comply with the Act’s provisions, the officer may issue a show-cause notice, which might result in the taxpayer’s composition scheme being denied.