Dear Taxpayer, While going through the returns furnished by your good self for the financial year 2017-18, 2018-19, 2019-20,2020-21,2021-22 and 2022-23, it has been observed that Input Tax Credit (for brevity, “ITC”) availed in FORM GSTR- 3B is less as compared to the details of the ITC available/auto populated in FORM GSTR-2A for a return period. This results in difference in ITC available in FORM GSTR-2A as compared to that availed in FORM GSTR-BB. In this case, it is presumed that ITC which has not been availed is not eligible as per the provisions of section 17 of the GST Act read with the rules thereunder, Therefore, as per the said section and the rules thereunder you are required to reverse such ITC. 2. Further, your kind attention is drawn towards the Circular No. 170/02/2022-GST dated 6" July, 2022 which clearly delineates that reversal of ITC of ineligible credit under section 17(5) or any other provisions of the GST Act and rules there under is required to be made under Table 4(B) and not under Table 4(D) of FORM GSTR- 3B. Paras 4.3 (A) and (B) of the said circular is reproduced hereunder for reference: (A) Total ITC (eligible as well as ineligible) is being auto-populated from statement in FORM GSTR-2B in different fields of Table 4A of FORM GSTR-3B (except for the ineligible ITC on account of limitation of time period as delineated in sub- section (4) of section 16 of the CGST Act or where the recipient of an intra-State supply is located in a different State / UT than that of place of supply). (B) Registered person will report reversal of ITC, which are absolute in nature and are not reclaimable, such as on account of rule 38 (reversal of credit by a banking company or a financial institution), rule 42 (reversal on input and input services onaccount of supply of exempted goods or services), rule 43 (reversal on capital goods on account of supply of exempted goods or services) of the CGST Rules and for reporting ineligible ITC under section 17(5) of the CGST Act in Table 4 (B) (1). 3. Thus, the correct procedure for the said ineligible ITC was to first avail the ITC and thereafter reverse the same in FORM GSTR-3B in accordance with the said Circular. Furthermore, your kind attention is drawn towards section 17 of the IGST Act, 2017, whereby ITC not availed will be apportioned to the State after filing of annual return by the taxpayer. It therefore emerges that where the said procedure has not been followed for the reversal of ITC, there is loss of revenue to the State. 4. In light of the above, it is hereby advised to first avail the ITC as per FORM GSTR-2A in Table 4A of FORM GSTR-3B and then reverse ineligible or blocked ITC in Table 4(B) (1) of the said FORM. This shall result in accruing of due share of revenue to the State through settlement process. 5. There is no gainsaying the fact that where the said procedure for ITC Teversal has not been followed, the tax administration reserves its right to initiate necessary proceedings under the provisions of law to ensure that the State gets its due share of revenue. Looking forward to your positive compliance on the above matter.