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Reversal of Input Tax Credit: If a registered person who has availed input tax credit on any inward supply of goods or services or both, but fails to pay the supplier within a period of 180 days, then ITC availed is to be reversed.
In GSTR3B the amount that is coming in , but in case of Reversal ITC this amount has to be deducted from Total ITC as Input Credit is not available. Net Available ITC = All Other ITC - ITC Reversed, where All Other
ITC is the amount for which you have to take Input Credit
You can follow below steps to make ITC Reversal entry in Book Keeper.
1. You need to create one account under Direct Expense e.g. ITC REVERSAL
3. Go to Transactions > Journal > Create.
3. You need to select the ITC REVERSAL, enter total tax amount on debit side. Then select CGST, SGST accounts, enter individual tax amount on credit side.
4. You need to select Reversal Of ITC as given below.
5. Now you can check GSTR3B Report, amount under Net ITC Available is 0 as
All Other ITC(A) - ITC Reversed(B) = Net ITC Available(C).
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