ITC Reclaim Ledger & RCM Ledger – What Professionals Must Watch Now

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 Over the last two years, GSTN has gradually moved from advisories and warnings to system-enforced compliance, especially in the area of Input Tax Credit (ITC). The latest Advisory & FAQs (Dec 2025) clearly signal that excess ITC claims will no longer be tolerated by the system.

 

1.   Electronic Credit Reversal & Re-claimed Statement (ITC Reclaim Ledger): -

Introduced from:

  • Aug 2023 (monthly filers)
  • Jul–Sep 2023 (quarterly filers)

 

This ledger tracks:

  • ITC temporarily reversed in Table 4(B)(2), and
  • Its subsequent re-claim through Table 4(A)(5) read with 4(D)(1).

 

What has changed now?

  • Re-claimed ITC in Table 4(D)(1) must be within the available balance of the ITC Reclaim Ledger plus current period reversal.
  • Negative closing balance is not allowed.
  • If negative, GSTR-3B filing will be blocked unless excess ITC is reversed—even resulting in cash liability if no ITC is available.

 

Conclusion: -

Eligibility alone is no longer enough; ledger balance must support the claim.

 

 

2.   RCM Liability / ITC Statement (RCM Ledger): -

Introduced from:

  • Aug 2024 (monthly filers)
  • Jul–Sep 2024 (quarterly filers)

 

This statement aligns:

  • RCM liability paid in Table 3.1(d) with
  • RCM ITC claimed in Table 4(A)(2) & 4(A)(3).

 

What has changed now?

  • RCM ITC claimed cannot exceed RCM tax paid + closing RCM ledger balance.
  • Negative RCM balance will block GSTR-3B filing unless:
    • Additional RCM tax is paid, or
    • ITC claim is reduced.

 

Conclusion: -

RCM ITC earlier reversed must be reclaimed only via Table 4(A)(5), not through 4(A)(2)/(3).

 

3.   Big Picture for GST Professionals: -

·       Warning-based compliance is over.

·       Ledger-based validations are here to stay.

·       Past excess claims will now surface as filing blocks.

·       Table 4(A)(5) has become critically important.

·       Ledger reconciliation is now as vital as return filing.

4.   Final Thought: -

GST compliance is moving towards system-driven discipline. For professionals, this is the right time to clean up legacy reversals, reconcile ledgers, and realign client practices before the portal forces corrections.

 

In GST today, a healthy ledger is as important as correct eligibility.

 

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