GST WEEKLY UPDATE :7/2026-27 (17.05.2026) By CA Vipul Khandahar

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1.Comprehensive Q&A Matrix: Practical Guide to Form GSTR-3B Filing: Source Document: The ICAI – Practical FAQs on filing of Form GSTR-3B:

1. Input Tax Credit (ITC) Reversals, Reclaims & Ledger Validations

FAQ Subject	The Problem / Scenario	Correct Reporting & Rectification Protocol	Key System Validations
Erroneous Permanent Reversal	ITC was inadvertently reversed under Table 4(B)(1) (Permanent) instead of Table 4(B)(2) (Temporary), meaning it is not reflected in the Reclaim Ledger.	Re-claim is allowed subject to Section 16(4) time limits. Rectification: Net it off in a subsequent month by reducing the equivalent amount from the actual permanent reversals to be reported in Table 4(B)(1).	The Electronic Credit Reversal and Re-claimed Statement only tracks temporary reversals reported in Table 4(B)(2).
Past Error in Permanent Reversal	Permanent reversals were erroneously reported under Table 4(B)(2), artificially inflating the Reclaim Ledger.	Rectification: Identify and reconcile the misreported amounts. Neutralize the impact by making an offsetting reduction/adjustment in Table 4(B)(2) in the current return to bring the ledger balance to its correct position.	Fresh permanent ineligible ITC must strictly go into Table 4(B)(1). The past adjustment must be revenue-neutral.
Reporting Reclaimed ITC (e.g., RCM)	When reclaiming a temporary reversal (like a past RCM credit), should it go back to its original specific table or a general table?	Protocol: Reclaimed credit must be reported in Table 4(A)(5) (“All other ITC”) and simultaneously disclosed in Table 4(D)(1). Never route it back through Table 4(A)(2) or 4(A)(3).	The system strictly validates that claims in Tables 4(A)(2) and 4(A)(3) cannot exceed the current period’s RCM liability plus the RCM Ledger closing balance. Misrouting triggers validation errors.
Rule 42 & 43 Year-End Mismatches	Reversals are absolute and belong in Table 4(B)(1), but monthly/provisional figures may differ from the final annual computation.	Practical Approach: Report monthly provisional reversals in Table 4(B)(2) (Temporary). At year-end, reclaim the provisional amounts and report the final annual computed reversal in Table 4(B)(1).	Prevents a situation where excess provisional reversals cannot be easily reclaimed because they were frozen in Table 4(B)(1).

2. Reverse Charge Mechanism (RCM) & Import Compliances

FAQ Subject	The Problem / Scenario	Correct Reporting & Rectification Protocol	Key System Validations
Misclassification of RCM ITC	RCM liability was paid in Table 3.1(d), but the corresponding eligible ITC was clubbed under Table 4(A)(3) instead of Table 4(A)(2).	Procedural lapse only; ITC will not be denied. Rectification: Form GSTR-3B cannot be revised. Segregate/adjust the figures in a subsequent GSTR-3B OR declare accurate, segregated figures in the Annual Return (Form GSTR-9).	The GSTN system validates that the combined ITC claimed in Tables 4(A)(2) and 4(A)(3) does not exceed the total declared RCM liability. No negative balance error is triggered.
Import Goods ITC Missing in GSTR-2B	IGST paid on import of goods is eligible, but the Bill of Entry (BoE) does not appear in Form GSTR-2B due to ICEGATE delays.	Claim is fully permissible based on the physical BoE, proof of IGST payment, and books. Action: Use the “Search BoE” utility on the GST portal to manually fetch the missing records.	GSTR-2B matching restrictions primarily apply to domestic supplier-reported invoices, not physical custom imports.
RCM Services from Unregistered Persons	Inward RCM supplies from unregistered persons do not appear in GSTR-2B since no supplier return is filed.	Protocol: Self-assess and pay liability based on the Time of Supply (Sec 13(3)). Issue a self-invoice under Section 31(3)(f) within the timelines specified in Rule 47A. • Pay liability: Table 3.1(d) • Claim ITC: Table 4(A)(2)/4(A)(3).	Non-reflection in GSTR-2B does not eliminate or defer reverse charge liability.

3. Outward Supplies, Corrections & Credit Notes (IMS)

FAQ Subject	The Problem / Scenario	Correct Reporting & Rectification Protocol	Key System Validations
Outward Invoices Missed in GSTR-1	Omission of sales invoices is identified after filing GSTR-1 but before filing GSTR-3B.	Protocol: Furnish the missed invoice in Form GSTR-1A before filing GSTR-3B. Verify that the additional liability flows into GSTR-3B, and then discharge the tax.	Avoid paying directly via GSTR-3B without reporting the invoice, as it causes return mismatches and blocks the recipient’s ITC. Form GSTR-1A does not allow recipient GSTIN changes.
Outward RCM Supplies Treatment	Should a supplier report outward supplies where the recipient pays tax under RCM as “exempt supplies”?	Protocol: No. These are taxable supplies, not exempt supplies. The supplier should not report the value of such outward RCM supplies anywhere in their own Form GSTR-3B.	Reporting them as exempt creates avoidable distortions in exempt turnover disclosures.
Double Reversal Risk via IMS Credit Notes	A credit note on the Invoice Management System (IMS) is “deemed accepted” into GSTR-2B, reducing GSTR-3B ITC automatically, but the taxpayer already reversed this ITC in a prior period.	Protocol: Do NOT manually override the auto-populated figures in GSTR-3B. Instead, use the ITC declaration facility on IMS against that record to state the actual amount previously availed/reversed.	Manual overrides in GSTR-3B without an anchor action on the IMS trigger system validation errors.

4. Cash Pay Restraints, Penalties & System Controls

FAQ Subject	The Problem / Scenario	Correct Reporting & Rectification Protocol	Key System Validations
Procedural Non-Compliance with Rule 86B	Taxpayer utilized ITC in excess of 99% for output liability, failing to pay the mandatory minimum 1% via the Electronic Cash Ledger.	Protocol: The ITC remains valid, but it is a cash shortfall lapse. Regularization: Recompute liability, pay the 1% shortfall in cash via Form DRC-03. Then, file a refund under Sec 54(1) for the excess ITC utilized OR request an officer to re-credit it via Form PMT-03.	Applies to taxpayers with monthly taxable turnover exceeding ₹50 lakhs (subject to certain exceptions).
Modifying Interest & Late Fees (Table 5.1)	Can auto-populated interest and late fees in Table 5.1 be modified or edited by the taxpayer?	Protocol: • Late Fee: Strictly non-editable; no user-end waiver/modifications allowed. • Interest: Editable but cannot be reduced below the system minimum. If data is correct but errors persist, use the “Re-compute Interest” utility or log a grievance.	System enforces hard validations to prevent reducing computed interest underneath statutory baselines.
Handling ‘Negative Liability’	Credit Notes exceeded the Outward Supplies in a previous tax period, creating a negative balance.	Protocol: The balance sits securely in the Negative Liability Statement. It will automatically adjust and net off against the liabilities of subsequent tax periods.	The statement is strictly for view purposes and cannot be edited manually.

GSTAT Ranchi Bench Reiterates Dress Code for Authorised Representatives; Grants Summer Relaxation:

The Rule: Professional vs. Prescribed Attire

According to Rule 122, every authorised representative—excluding a relative or a regular employee of a litigating party—must appear before the Appellate Tribunal in their designated professional dress.

In cases where no specific professional uniform is mandated by their respective professional bodies, the Circular outlines a strict default dress code:

Dress Code for Male Representatives

A close-collared black coat, OR
An open-collared black coat worn with a white shirt and a black tie.

Dress Code for Female Representatives

A black coat worn over a white sari, OR
A black coat worn over any other formal white dress.

Seasonal Relief: The Summer Relaxation Window

Acknowledging the severe weather conditions during the peak of the hot season, the GSTAT Ranchi Bench has officially permitted a temporary relaxation of the strict uniform rules.

Summer Relaxation Period: From 15th April to 31st August (annually)

During this specific window, authorised representatives appearing before a Bench of the Appellate Tribunal may dispense with the wearing of a black coat.

Key Clarification: Departmental Officers Do Not Qualify as “Regular Employees”

The Circular carves out a crucial distinction regarding who must follow these guidelines. It explicitly defines the scope of the phrase “regular employee of a party.”

The Exception: While regular corporate or individual employees representing their employers are exempt from the formal dress code, Departmental Officers appointed as authorised representatives are NOT exempt.

The Mandate: Departmental Officers representing the revenue department must strictly adhere to the prescribed formal dress code (including the summer relaxation terms) when appearing before the Bench.

GSTAT Principal Bench Extends Leniency Guidelines for Appeal Scrutiny Till December 2026:

Directives for Scrutiny Officers: Filing of Taxpayer Appeals (Form APL-05)

The directive instructs Registrar-level officers (including Joint, Deputy, and Assistant Registrars) to follow a pragmatic approach while verifying digital submissions.

Defect flags must not be raised by the scrutiny desk if the appellant meets the following criteria:

Substantive Soft Copies Available: The Form GST APL-05 contains legible soft copies of the Show Cause Notice (SCN), Order-in-Original (OIO), Order-in-Appeal (OIA), Statement of Facts, grounds of appeal, proof of pre-deposit, and required Court fees.
Higher Court Relief: If an appellant possesses valid orders from Higher Courts granting specific exemptions from paying the prescribed Court Fee or Pre-Deposit, no defect can be flagged.
Certified Copy Verification: When an appeal is preferred under Section 112(1) attaching scanned copies of the certified OIO and OIA, the scrutiny officer must accept them without raising a defect, provided they are satisfied with the official endorsement made by the issuing authorities.
Representation Mandate: Appellants must cleanly upload either an Authorization issued in favor of their tax professional or a executed Vakalatnama if represented by an Advocate.
Authentication: The portal submission requires one valid Verification and Digital Signature from the appellant.

Strict Checklist for Revenue (Departmental) Appeals

The instruction carves out a separate, rigid documentary framework for applications filed by the Revenue Department under Section 112(3) of the CGST Act. For a Departmental appeal to clear scrutiny, the following six documents are mandatory:

Show Cause Notice (SCN)
Order-in-Original (OIO)
Order-in-Appeal (OIA)
The official Opinion of the Commissioner explicitly directing the subordinate officer to file the application
Statement of Facts
Grounds of Appeal

Exemption Note: The directive explicitly reiterates that no Court Fee or Pre-Deposit is required for appeals preferred by the Revenue Department.

GSTAT Appeal Scrutiny Matrix at a Glance

Parameter	Taxpayer Appeals (Sec 112(1))	Departmental Appeals (Sec 112(3))
Core Documentation	SCN, OIO, OIA, Statement of Facts, Grounds of Appeal.	SCN, OIO, OIA, Statement of Facts, Grounds of Appeal.
Specific Mandate	Authorization Letter / Vakalatnama for legal counsel.	Official written opinion of the Commissioner authorizing the appeal.
Pre-Deposit & Court Fees	Mandatory (unless explicitly exempted by a Higher Court order).	Fully Exempted.
Leniency Criteria	Scanned certified copies with clear authority endorsements must be accepted without defect flags.	Strict compliance with the 6-document checklist is expected.

Disclaimer:

This publication contains information for general guidance only. It is not intended to address the circumstances of any particular individual or entity. Although the best of endeavour has been made to provide the provisions in a simpler and accurate form, there is no substitute to detailed research with regard to the specific situation of a particular individual or entity. We do not accept any responsibility for loss incurred by any person for acting or refraining to act as a result of any matter in this publication.