GST portal showing negative balance – What to do? How does it impact?
Know the effect of negative reclaim ledger balance / RCM statement balance in GST Portal!
The GSTN has issued an advisory on 29.12.2025 with respect to the Electronic Credit Reversal and Re-claimed Statement and the RCM Liability/ITC Statement on the GST Portal – explains what could directly impact my filing of GSTR 3B. Let us go through the summary of the advisory and the system validations that are likely to be introduced – which is provided below for your reference and necessary action:
Key Points From The Advisory
- The balance in the Electronic Credit Reversal and Re-claimed Statement indicates the portion of input tax credit (ITC) reflecting in GSTR-2B but pending to be re-availed as ITC by the registered person in GSTR-3B.
- However, as per the GSTN advisory, a negative balance in the Electronic Credit Reversal and Re-claimed Statement indicates that the registered person has re-availed excess ITC in GSTR-3B, which is liable for reversal.
- The balance in the RCM Liability/ITC Statement available on the GST Portal indicates the portion of tax paid under reverse charge for which ITC has not yet been availed.
- As per the GSTN advisory, a negative balance in the RCM Liability/ITC Statement indicates that the registered person has availed excess ITC under reverse charge in GSTR-3B as compared to the actual RCM tax paid.
- The GSTN advisory further clarifies that GSTR-3B will not be allowed to be filed if such negative balances are not corrected.
Suggested Action Points
Before filing the next (or upcoming) GSTR-3B, it is important to review the following points to avoid portal-level issues or filing restrictions.
- Check the ITC Reversal / Re-claim Position
- Please verify the Electronic Credit Reversal and Re-claimed Statement on the GST Portal.
- Ensure that ITC re-claimed in Table 4D(1) is only against temporary reversals earlier reported in Table 4B(2) of GSTR-3B.
- Ensure that there is no negative balance in this statement.
In few cases, most businesses find that the issue is not limited to just regular ITC alone. Similar kind of mismatches can also occur with respect to Reverse Charge Mechanism (RCM) credits. This especially where payments and ITC claims are tracked for different months. Hence it is important to review the RCM position separately.
Check RCM ITC Position (if applicable)
- Please verify the RCM Liability/ITC Statement on the GST Portal.
- Ensure that RCM ITC claimed in Table 4(A)(2) and 4(A)(3) is only against RCM tax actually paid and reported in Table 3.1(d) of GSTR-3B.
- Ensure that there is no negative balance in this statement.
If Any Negative Balance Is Observed
If any negative balance is observed, it does not always mean that there has been an intentional excess claim. In most cases, such balances arise due to timing differences, incorrect linkage between reversal and re-claim or even from inadvertent reporting errors.
However, these balances cannot be simply ignored, as the system may restrict GSTR-3B filing until they are corrected.
- Kindly identify the reasons for such negative balances and take appropriate corrective action while filing the upcoming GSTR-3B.
- Please feel free to reach out to our GST consultants to discuss the way forward before filing the upcoming GSTR-3B, in case any negative balances appear on the GST Portal.
While corrective measures can help resolve the current (or immediate) issue, having basic internal controls in place is also equally important to help prevent such mismatches from occurring again.
Maintain Internal Records Going Forward
As a Best Practice Going Forward, maintain an invoice-level tracking of re-claimable ITC will help avoid issues once GSTN fully enforces these validations.
- Kindly maintain a basic working for future periods capturing:
- Permanent ITC reversals made in Table 4B(1), and
- Temporary ITC reversals made in Table 4B(2) and the corresponding re-claim thereof.
- This will help avoid issues once GSTN fully implements the new restrictions.
- It is also advisable to maintain invoice-level details of the balance reflected in the Electronic Credit Reversal and Re-claimed Statement on the GST Portal and update the same every month to maintain control over eligible re-claimable ITC.
So, the key takeaway from this advisory is:
GST compliance is moving from disclosure-based to system-validated. Even small mismatches that earlier went unnoticed can now result in filing restrictions or reversals. Hence, regular reconciliation is no longer optional – it’s essential.
A timely review of ITC reversal, re-claim and RCM positions before filing GSTR-3B can help avoid unnecessary complications later. Addressing these issues early is always easier than explaining them during scrutiny or assessment.
Contact us for any assistance!
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