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Input GST in the purchase books for the month is higher than net ITC in GSTR-3B Table 4, and the finance executive cannot separate errors from legitimate differences.
Books record GST on every purchase; GSTR-3B claims only eligible credit appearing in GSTR-2B, less reversals. Gaps come from blocked credit, invoices not yet in GSTR-2B, reversals, reverse-charge and import credit, and opening balances.
A monthly bridge from books input GST to GSTR-3B Table 4C, with each line tagged as timing (reverses later) or permanent (never claimable).
A zero unexplained difference each month, a list of timing items to claim later, and blocked credit moved to cost in the books.
Your books record GST on every purchase invoice you post. GSTR-3B claims only the eligible credit that appears in your GSTR-2B, less any reversals. So the two figures differ most months, and three things explain most of the gap: blocked credit, reversals and timing.
Where does each figure come from?
The books figure is the input GST posted in Tally, Zoho Books or your ERP for the month. The return figure is GSTR-3B Table 4: 4A is ITC available, 4B is ITC reversed and 4C is net ITC. Since October 2024, Table 4 is pre-filled from GSTR-2B, which is itself shaped by your actions in the Invoice Management System (IMS).
What are the likely causes?
| Cause | Effect | Timing or permanent | Fix |
|---|---|---|---|
| Invoice not yet in GSTR-2B | Books higher | Timing | Hold in ITC pending; claim when it appears |
| Blocked credit under Section 17(5) | Books higher | Permanent | Move GST to expense or asset cost |
| ITC reversed (Rule 37, 42, 43) | Books higher | Rule 37 reverses on payment; Rule 42 and 43 are permanent | Post a reversal entry |
| Reverse-charge credit | Return may be higher | Timing | Book RCM tax and credit in the same month |
| Import IGST from bill of entry | Either way | Timing | Match bill of entry date with GSTR-2B |
| Opening balance from earlier year | Either way | One-off | Review and adjust once |
How do I build a monthly bridge from books ITC to GSTR-3B Table 4?
- Start with total input GST posted in the books for the month.
- Subtract blocked credit.
- Subtract invoices not yet in GSTR-2B.
- Subtract reversals reported in Table 4B.
- Add or subtract reverse-charge and import timing items.
- The result should equal Table 4C. Anything left is an error to investigate.
Which differences are permanent and which reverse next month?
Blocked credit and Rule 42 or Rule 43 reversals are permanent. Invoices waiting for GSTR-2B and Rule 37 reversals for suppliers unpaid beyond 180 days are timing items. They come back when the supplier files or when you pay. Keep timing items on a list with dates. Any timing item still open after the Section 16(4) deadline of 30 November following the financial year becomes permanent, because the credit can no longer be claimed.
Worked example
For August, the books show input GST of ₹3,10,000. GSTR-3B Table 4C shows net ITC of ₹2,62,000. The gap is ₹48,000.
| Line | Amount | Type |
|---|---|---|
| Books input GST | ₹3,10,000 | |
| Less: GST on a car for the sales manager, blocked | ₹30,000 | Permanent |
| Less: supplier has not filed, not in GSTR-2B | ₹12,000 | Timing |
| Less: Rule 37 reversal, supplier unpaid past 180 days | ₹6,000 | Timing |
| Equals GSTR-3B Table 4C | ₹2,62,000 |
Check: ₹30,000 + ₹12,000 + ₹6,000 = ₹48,000, and ₹3,10,000 minus ₹48,000 = ₹2,62,000. Of the gap, ₹18,000 should come back in later months. The ₹30,000 never will, so the accountant moves it to the cost of the car.
What to read next
- Next in this series: I made a mistake in my filed GSTR-3B: can I revise it?
- The full monthly match: three-way ITC reconciliation in Excel
- What can never be claimed: blocked ITC under Section 17(5)
- Matching at volume: GST reconciliation software
Inward GST matching (GSTR-2A, GSTR-2B, ITC and IMS) is on the TransactIG roadmap.
Content authored by practitioners with experience at Amazon India, Intuit QuickBooks, and the Tata Group. Meet the team →