Before July 2022, many businesses reported net ITC figures directly in Table 4(A) after privately deducting blocked taxes in their spreadsheets. This practice distorted portal records and caused persistent mismatches between Form GSTR-2B and the electronic credit ledger. To standardize tax administration across India, the Central Board of Indirect Taxes and Customs issued mandatory guidelines that changed how Table 4 operates.
The core statutory instruction is contained in CBIC Circular No. 170/02/2022-GST, dated 06 July 2022. Under this framework, you cannot cherry-pick what enters Table 4(A). The gross figure auto-populated from Form GSTR-2B sits in Table 4(A), and any downward adjustment must be channeled through Table 4(B)(1) or Table 4(B)(2). Knowing the precise legal boundaries between these two sub-tables protects you from audit scrutiny and prevents permanent loss of working capital.
Common mistake: Entering blocked credit under Section 17(5) directly into Table 4(D)(2) instead of Table 4(B)(1). The GST portal manual specifies that Table 4(D)(2) is strictly for reporting invoices where ITC is restricted by place of supply rules or the Section 16(4) limitation period. Blocked credits from GSTR-2B must flow into Table 4(A) and be reversed under Table 4(B)(1).
Permanent reversals under Table 4(B)(1)
Table 4(B)(1) carries the official title “As per rules 38, 42 & 43 of CGST Rules and section 17(5)”. The governing principle for this sub-table is absolute finality. Once an amount is reversed here, it can never be reclaimed in any future tax period.
The statutory provisions routed through Table 4(B)(1) include:
- Rule 38 reversals: Banking companies and financial institutions opting for the 50 percent monthly credit restriction under Section 17(4) of the CGST Act.
- Rule 42 reversals: Monthly common credit reversals on inputs and input services used for exempt supplies or non-business purposes. For detailed calculation mechanics, consult our guide on ITC reversal Rule 42 common credit formula.
- Rule 43 reversals: Apportionment of common credit on capital goods used partly for taxable supplies and partly for exempt supplies.
- Section 17(5) blocked credits: Motor vehicles with seating capacity up to 13 persons, club memberships, food and beverages, works contracts for civil structures, and goods lost or destroyed.
Temporary reversals under Table 4(B)(2)
Table 4(B)(2) is labeled “Others” on the GST portal return tile. Despite its generic name, official tax instructions establish this sub-table as the exclusive holding bay for temporary reversals. These are credits that the taxpayer cannot legally claim in the current tax period, but will legitimately reclaim in the future when specific statutory conditions are fulfilled.
According to the official GSTN GSTR-3B user manual, the primary situations that belong in Table 4(B)(2) are:
- Rule 37 reversals for 180-day vendor non-payment: under the second proviso to Section 16(2), if you fail to pay the supplier consideration and tax within 180 days of the invoice date, you must reverse the credit. You reclaim this credit in full the moment you make the payment.
- Section 16(2)(b) goods in transit: invoices appearing in GSTR-2B where the underlying goods or services have not yet been physically received by your warehouse before month-end. You reverse the amount in Table 4(B)(2) and reclaim it upon actual delivery.
- Section 16(2)(c) tax payment pending: cases where a recipient identifies that the supplier has not discharged tax liability, requiring temporary withholding until confirmation is obtained.
Comparison: Table 4(B)(1) vs Table 4(B)(2)
The legal distinctions and practical consequences of choosing between Table 4(B)(1) and Table 4(B)(2) are summarized below:
| Compliance feature | Table 4(B)(1) [Permanent] | Table 4(B)(2) [Temporary] |
|---|---|---|
| Nature of reversal | Absolute, irreversible credit loss | Temporary deferral of credit entitlement |
| Governing statutory sections | Section 17(5), Section 17(4), Rules 38, 42, 43 | Section 16(2)(b), Section 16(2)(c), Rule 37, Rule 37A |
| Reclaim eligibility | Cannot be reclaimed in any return | Reclaimable once statutory criteria are satisfied |
| How reclaim is reported | Not applicable (any attempt triggers notice) | Add to Table 4(A)(5) and report in Table 4(D)(1) |
| GSTR-2B linkage | Must be part of auto-populated 4(A) base | Must be part of auto-populated 4(A) base |
| Audit impact of misclassification | Foregoes legitimate future working capital | May invite scrutiny for unauthorized reclaims |
Worked arithmetic example: monthly ledger impact
To examine the numerical mechanics, consider a registered business, Zenith Manufacturing Private Limited, preparing its GSTR-3B return for the month of September 2026. The purchase register and GSTR-2B present the following figures across CGST, SGST, and IGST.
The accounting records establish these facts:
- Gross auto-populated credit in Form GSTR-2B under Table 4(A)(5): ₹10,00,000 (CGST ₹3,50,000, SGST ₹3,50,000, IGST ₹3,00,000).
- Corporate car insurance and staff catering expenses blocked under Section 17(5): ₹60,000 (CGST ₹30,000, SGST ₹30,000).
- Common input credit reversal calculated under Rule 42 for exempt scrap sales: ₹40,000 (CGST ₹15,000, SGST ₹15,000, IGST ₹10,000).
- Three vendor invoices exceeding 180 days unpaid, requiring reversal under Rule 37: ₹1,20,000 (CGST ₹50,000, SGST ₹50,000, IGST ₹20,000).
- Raw materials billed on 29 September 2026 but still in transit, goods received 04 October 2026: ₹80,000 (IGST ₹80,000).
- Past temporary reversal from July 2026 now paid to vendor in September 2026: ₹50,000 (IGST ₹50,000).
| GSTR-3B return line | CGST (₹) | SGST (₹) | IGST (₹) | Total tax (₹) |
|---|---|---|---|---|
| Table 4(A)(5) Auto-drafted from GSTR-2B | 3,50,000 | 3,50,000 | 3,00,000 | 10,00,000 |
| Add: Reclaimed ITC from earlier period | 0 | 0 | 50,000 | 50,000 |
| Total Table 4(A) Gross available ITC | 3,50,000 | 3,50,000 | 3,50,000 | 10,50,000 |
| Table 4(B)(1): Section 17(5) blocked credits | 30,000 | 30,000 | 0 | 60,000 |
| Table 4(B)(1): Rule 42 exempt common credit | 15,000 | 15,000 | 10,000 | 40,000 |
| Total Table 4(B)(1) Permanent reversals | 45,000 | 45,000 | 10,000 | 1,00,000 |
| Table 4(B)(2): Rule 37 vendor unpaid > 180 days | 50,000 | 50,000 | 20,000 | 1,20,000 |
| Table 4(B)(2): Section 16(2)(b) goods in transit | 0 | 0 | 80,000 | 80,000 |
| Total Table 4(B)(2) Temporary reversals | 50,000 | 50,000 | 1,00,000 | 2,00,000 |
| Table 4(C) Net ITC credited to ledger | 2,55,000 | 2,55,000 | 2,40,000 | 7,50,000 |
| Table 4(D)(1) Reclaimed ITC reporting memo | 0 | 0 | 50,000 | 50,000 |
Mathematical proof of the electronic credit ledger update:
- Starting gross baseline: Table 4(A) total equals ₹10,50,000.
- Aggregate reversals: Table 4(B)(1) permanent reversals (₹1,00,000) + Table 4(B)(2) temporary reversals (₹2,00,000) = ₹3,00,000.
- Net credit added to cash offset balance:
₹10,50,000 - ₹3,00,000 = ₹7,50,000.
Step-by-step reporting workflow on the GST portal
When preparing your monthly GSTR-3B return online, execute the following sequence to guarantee exact alignment with tax system validations:
- Verify GSTR-2B auto-population in Table 4(A): Open Form GSTR-3B for the tax period. Ensure the figures in Table 4(A)(5) match the net eligible ITC generated in your Form GSTR-2B statement. For a comprehensive overview of how GSTR-2B communicates credit, read our primer on GSTR-3B meaning and format.
- Add reclaimed credits in Table 4(A)(5): If you are re-availing credits previously reversed under Table 4(B)(2), add them to the auto-drafted value in Table 4(A)(5). If the edited tile highlights in red, verify your reconciliation records to confirm the adjustment.
- Enter permanent reversals into Table 4(B)(1): Type the total sum of Section 17(5) blocked credits, Rule 42 common credit, and Rule 43 calculations. Ensure this field contains no temporary holds.
- Enter temporary reversals into Table 4(B)(2): Input the total value of unpaid vendor bills exceeding 180 days and goods still in transit.
- Complete information reporting in Table 4(D)(1): If you added reclaimed credits in Table 4(A)(5) during Step 2, enter the identical reclaim amount into Table 4(D)(1). This declaration informs the tax department that the credit addition represents an authorized reclaim rather than an unverified purchase.
DRC-01C notice risk: Increasing Table 4(A)(5) above the GSTR-2B baseline without reporting corresponding figures in Table 4(D)(1) frequently triggers automated notices in Form GST DRC-01C under Rule 88D. Always document your reclaim paper trail with payment references and earlier GSTR-3B return filing dates.
Vendor communication for Rule 37 reversals
When invoices approach 150 days without payment, notify your finance department or the vendor immediately. If the 180-day threshold is breached, the tax credit must be surrendered in Table 4(B)(2) with interest liability under Section 50(1).
Use the following standard format when coordinating payments with your accounts payable desk:
Related guides
- Format of GSTR-3B tables explained
- GSTR 3B Table 11 adjustments for credit debit notes quarterly
- GSTR-9 Table 7 Rule 37 ITC reversal: 180 days non-payment and reclaim
- Pharma expired medicine ITC reversal: circular rules and procedure
Frequently asked questions
What is the difference between Table 4(B)(1) and Table 4(B)(2) in GSTR-3B?
Table 4(B)(1) is reserved for permanent ITC reversals that can never be reclaimed in any subsequent tax period, covering Rule 38 for banking companies, Rule 42 for inputs and input services, Rule 43 for capital goods, and Section 17(5) blocked credits. Table 4(B)(2) is for temporary reversals where credit can be reclaimed in future periods once statutory conditions are met, such as Rule 37 180-day vendor non-payment or Section 16(2)(b) goods in transit.
Where should Section 17(5) blocked credit be reported in GSTR-3B?
Under CBIC Circular No. 170/02/2022-GST, all inward supplies appearing in GSTR-2B, including invoices with blocked credit under Section 17(5), must first be taken into Table 4(A). The blocked tax portion must then be reversed under Table 4(B)(1). It must not be entered directly into Table 4(D)(2), because Table 4(D)(2) is only for reporting ineligible credit on account of Section 16(4) time bar or place of supply restrictions.
How do you reclaim temporary ITC reversals in a subsequent GSTR-3B?
When the underlying condition is satisfied (for instance, after paying the vendor for a Rule 37 reversal), the reclaimed amount is included in Table 4(A)(5) as eligible credit in the month of payment. At the same time, the exact reclaimed figure must be reported in Table 4(D)(1) for tracking purposes by the tax authorities.
Does Table 4(B) reversal automatically reduce the Electronic Credit Ledger credit?
Yes. The GST portal automatically calculates Table 4(C) Net ITC Available by applying the mathematical formula Table 4(A) minus the sum of Table 4(B)(1) and Table 4(B)(2). Only this net result in Table 4(C) gets credited to your Electronic Credit Ledger.
What happens if a temporary reversal is wrongly reported in Table 4(B)(1)?
Reporting a temporary reversal in Table 4(B)(1) labels it as an absolute and non-reclaimable credit loss. If you reclaim it later in Table 4(A)(5) and Table 4(D)(1), automated portal scrutiny checks will flag an anomaly because the initial reduction was classified as permanent rather than temporary.
Reconcile GSTR-2B invoices and isolate Table 4(B) reversals
Before filling Table 4 of Form GSTR-3B, you need an exact invoice-level classification between eligible claims, Section 17(5) blocked items, and unpaid vendor bills. Drop your monthly GSTR-2B file and your accounting purchase register into gstr2bmatch.in to pinpoint invoice mismatches and categorize your Table 4(B) adjustments in seconds. Your GSTR-2B and purchase register files are read in your browser and never uploaded to any server.
Last checked: 15 October 2026. Official statutory sources: CBIC Circular No. 170/02/2022-GST on Table 4 GSTR-3B reporting, GSTN Manual on Creation and Filing of Form GSTR-3B, and CGST Act, Section 16 (Eligibility and conditions for taking input tax credit).