GSTR-3B Will Be BLOCKED for ITC / RCM Ledger Mismatch

GST Portal Update: GSTR-3B Will Be BLOCKED for ITC / RCM Ledger Mismatch

Goods and Services Tax Network has introduced system-based validations in GSTR-3B filing for Electronic Credit Reversal & Reclaim Ledger & Reverse Charge Mechanism Liability & ITC. Goods and Services Tax Network has moved from soft warnings to hard system validation. If the ledgers do not reconcile, GSTR-3B filing will be technically blocked. These checks aim to prevent incorrect ITC claims and enforce real-time compliance. GSTN aims to curb excessive or premature ITC claims, forcing real-time compliance instead of post-filing corrections or disputes. (GSTN Advisory Effective from 29-12-2025)

Objective of the System Validations :

Goods and Services Tax Network Dept. Regulatory Intent related to moving towards real-time compliance and preventing incorrect ITC availment at the source. & Enhance trust & transparency in the GST credit system.

Ledgers Now Under Strict System Control :

Goods and Services Tax Network has upgraded its system controls: if ledgers for input Tax Credit Reclaim or Reverse Charge Mechanism Liability/Input Tax Credit show negative balances or mismatches, GSTR‑3B filing will now be blocked until corrections are made. Here’s what you need to know:

New Mandatory Ledgers and Validations

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

• Introduced: Aug 2023 (monthly filers), Q3 FY 2023 (QRMP)
• Tracks ITC reversals in Table 4(B)(2) and reclaims via Table 4(A)(5) / 4(D)(1).

RCM Liability / ITC Statement (RCM Ledger)

• Introduced: Aug 2024 (monthly), Q3 FY 2024 (QRMP)
• Captures Reverse Charge Mechanism liability in Table 3.1(d) and Input Tax Credit claimed in Table 4(A)(2) / 4(A)(3).
• These ledgers are accessible via Dashboard → Services → Ledger → [Corresponding Ledger].

Electronic Credit Reversal & Reclaimed Statement (ITC Reclaim Ledger) Tracks:

• Input Tax Credit reversed earlier (Table 4B)
• ITC reclaimed later (Table 4D)

RCM Liability / ITC Statement (Reverse Charge Mechanism Ledger) Tracks:

• RCM tax paid in cash
• Reverse Charge Mechanism Input Tax Credit claimed

What Changed (Critical) Earlier: Mismatch = Warning → Return could still be filed. Now (System Enforcement): Mismatch = ❌ GSTR-3B BLOCKED

When Will GSTR-3B Be Blocked?

Case 1: ITC Reclaim Ledger Mismatch

• GSTR-3B will not be filed if: Table 4D(1) Input Tax Credit reclaimed > (Input Tax Credit Reclaim Ledger balance + Table 4B(2) reversal of current month)
• Meaning: You cannot reclaim Input Tax Credit unless it is actually available in the system ledger.

Case 2: RCM Ledger Mismatch

• GSTR-3B will not be filed if: RCM ITC claimed in Table 4A(2)/(3) > (RCM tax paid in Table 3.1(d) + RCM ledger balance)
• Meaning: Pay Reverse Charge Mechanism first, then claim Input Tax Credit, not the other way round.

Already Showing a NEGATIVE Ledger Balance?

If ITC Reclaim Ledger is negative. You must:

• Reverse excess Input Tax Credit in Table 4B(2)
• If no input tax credit is available, a cash liability will arise

If RCM Ledger is negative, you must either:

• Pay additional RCM tax in Table 3.1(d) OR
• Reduce Reverse Charge Mechanism Input Tax Credit claimed in Table 4A(2)/(3)
• Until corrected, GSTR-3B remains blocked

Pre-Filing Compliance Before filing GSTR-3B:

For Negative Balance in ITC Reclaim Ledger:

• Reverse or adjust any excess Input Tax Credit claimed earlier, which means reverse the excess reclaimed Input Tax Credit in Table 4(B)(2).
• Discharge all outstanding RCM liability.
• If no current input tax credit is available, the reversal converts into additional liability. Ensure figures match Reclaim Ledger & Reverse Charge Mechanism Liability/Input Tax Credit Statement

For Negative Balance in RCM Ledger:

• Option 1: Pay additional RCM liability in Table 3.1(d) equal to the deficit.
• Option 2: Reduce the input tax credit claimed in Table 4(A)(2/3) by the deficit amount.
• Only after balances are non-negative and reconciled will GSTR‑3B submission be allowed.

Action points for businesses & tax teams to maintain accurate Input Tax Credit trackers, also reconcile books vs GST portal data before filing, & monitor Reverse Charge Mechanism liabilities & credits regularly.

Impact of the New Hard Validation by Taxpayers/Practitioners

Impact Goods and Services Tax Network has introduced system-based validations in GSTR-3B filing No post-filing corrections → Errors must be fixed before submission. Moreover, that GSTN system blocks filing if validations fail. which improves accuracy and reduces litigation.

• Taxpayers/Practitioners Earlier: Excess ITC claims trigger only a warning. Now: Negative balances or unsupported ITC claims will HARD-STOP GSTR‑3B filing until resolved. Reconcile Input Tax Credit Reclaim and RCM Ledger before starting GSTR‑3B.
• GST taxpayers/practitioners check ledger balances under Services → Ledger on the GST portal.
• Taxpayers/Practitioners Adjust filings by:
  • Reversing excess Input Tax Credit claims,
  • Making additional payments, or
  • Reducing Input Tax Credit claims, as needed.
• Ensure dashboards are clean, and all opening balances are accurately declared.

Immediate Action Checklist (Before Filing GSTR-3B)

• Log in to GST Portal
• Go to Returns → Ledgers
• Check:
  • ITC Reclaim Ledger
  • Reverse Charge Mechanism Ledger Ensure no negative balance
  • Match proposed 3B figures with ledger availability
  • Correct before clicking “Proceed to File.”

Specifically:

• ITC Reclaimed (4D1) must not exceed Available ITC Reversal Balance + Current Reversal in 4B2.
• Reverse Charge Mechanism ITC claimed must not exceed: RCM Liability in 3.1(d) + Closing RCM Ledger Balance.

GSTR‑3B filing can no longer bypass ledger mismatches. Address input tax credit reclaim or RCM ledger discrepancies now, or the system will refuse your submission until corrected. This is no longer an advisory. Ledger mismatch = System-level filing restriction. In summary

• Reclaimed Input Tax Credit Check—Cannot file GSTR-3B if reclaimed ITC > balance in Reclaim Ledger & System will block filing until corrected.

• RCM Input Tax Credit & Liability Check: Cannot claim Reverse Charge Mechanism ITC beyond available balance. & cannot file if Reverse Charge Mechanism liability remains unpaid.

GSTR-3B filing will now be system-controlled. No filing if the reclaimed Input Tax Credit exceeds the ledger balance, RCM liability is unpaid, & corrections must be made before submission.