The Goods and Services Tax Network (GSTN) has issued an advisory on December 29, 2025, regarding new system validations aimed at restricting excess Input Tax Credit (ITC) reclaim and Reverse Charge Mechanism (RCM) ITC availment. These measures will utilize the Electronic Credit Reversal Ledger and the RCM Liability/ITC Statement to ensure compliance.
Specifically, the GSTN will block the filing of GSTR-3B returns if any negative balances or excess ITC availment are detected. To comply, the ITC reclaimed in Table 4(D)(1) should not surpass the sum of the closing balance of the ITC Reclaim Ledger and the ITC reversed in Table 4(B)(2) for the current return period. Additionally, the RCM ITC claimed in Tables 4(A)(2) and 4(A)(3) must not exceed the total of the RCM liability paid in Table 3.1(d) and the closing balance of the RCM Ledger.
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If a negative balance is found in either ledger, taxpayers are required to reverse the excess ITC or pay any additional RCM liability. Failure to do so will result in the inability to file GSTR-3B. Taxpayers have previously been given multiple chances to declare and amend their opening balances, and the GSTN will now enforce system restrictions for non-compliance, moving away from an advisory-based approach.
Issued By: Goods and Services Tax Network (GSTN)
Advisory Date: 29 December 2025
Order / Advisory –
- GSTN has informed that negative balances or excess ITC availment will soon not be permitted, and GSTR-3B filing will be blocked where validations fail.
- Reclaimed ITC in Table 4(D)(1) must not exceed the combined balance of the ITC Reclaim Ledger closing balance and ITC reversed in Table 4(B)(2) of the current return period.
- RCM ITC claimed in Table 4(A)(2) and 4(A)(3) must not exceed the combined value of RCM liability paid in Table 3.1(d) and the closing balance of the RCM Ledger.
- Where a negative balance already exists in either ledger, taxpayers must mandatorily reverse excess ITC or pay additional RCM liability, failing which GSTR-3B filing will not be allowed.
- Taxpayers were provided multiple opportunities to declare and amend opening balances, and further non-compliance will now be system-restricted rather than advisory-based.
