ITC Reversal Calculator

Rule 42 (Inputs & Input Services) · Rule 43 (Capital Goods) · CGST Rules 2017 · Full T→C1→C2→D1→D2 working · Annual True-Up · GSTR-3B Table 4(B)(1)

ITC Pool Segregation Flow — Rule 42

T (Total ITC) → T1 (Exclusively non-business — fully reversed) → T2 (Exclusively exempt — fully reversed) → T3 (Blocked u/s 17(5) — fully reversed) → C1 = T − T1 → C2 = C1 − T2 − T3 (Common Credit) → D1 = C2 × (Exempt/Total) [Reversed] → D2 = 5% × C2 [Non-business deemed, Reversed] → C3 = C2 − D1 − D2 (Net Eligible ITC)

Rule 42 — Inputs & Input Services

Rule 43 — Capital Goods

Annual True-Up

Step 1 — Total ITC & Exclusive Credit

T — Total ITC on Inputs & Input Services for the tax period (₹) All ITC availed on all inward supplies (inputs and input services) during this return period

₹

T1 — ITC exclusively for non-business purposes (₹) Goods/services used exclusively for personal or non-business use. Fully reversed.

₹

T2 — ITC exclusively for exempt supplies (₹) Goods/services exclusively used to make exempt supplies. Fully reversed.

₹

Step 2 — Blocked Credit & Turnover

T3 — Blocked / Ineligible ITC u/s 17(5) (₹) Motor vehicles, food & beverages, club memberships, personal use items, works contract etc. Fully reversed.

₹

Exempt Supply Turnover for the period (₹) Exempt + Nil-rated + Non-GST supplies. Exclude zero-rated (exports). Used for D1 ratio.

₹

Total Turnover for the period (₹) Taxable + Zero-rated + Exempt + Non-GST. Exclude RCM inward supplies. Used as denominator.

₹

Step 3 — Period

Tax Period

Already reversed this year (cumulative) (₹) Sum of D1+D2 reversed in previous months of FY 2026-27 (for true-up reference)

₹

About This Tool

The ITC Reversal Calculator computes the amount of Input Tax Credit (ITC) that must be reversed under the GST Act for various situations: partial exemption (Rule 42 — for mixed supply of taxable and exempt goods/services), capital goods (Rule 43), and other specific scenarios such as non-payment to supplier within 180 days (Section 16(2)), goods used for personal purposes, or goods written off. Accurate ITC reversal is critical to avoid demand notices in GST scrutiny.

How to Use

Select the reason for ITC reversal (Rule 42 — exempt supply, Rule 43 — capital goods, 180-day non-payment, etc.).
For Rule 42: enter total ITC claimed, value of exempt supplies, and total turnover.
For 180-day non-payment: enter the ITC originally claimed and the invoice details.
Click Calculate — the tool shows the exact reversal amount to be entered in GSTR-3B (Table 4B).

Frequently Asked Questions

Under which table of GSTR-3B is ITC reversal reported?

ITC reversals are reported in Table 4B of GSTR-3B — specifically Table 4(B)(1) for Rule 42/43 reversals and 4(B)(2) for other reversals.

What is Rule 42 ITC reversal?

Rule 42 applies when a registered person makes both taxable and exempt/nil-rated supplies. ITC attributable to exempt supplies must be reversed proportionally.

What happens if ITC is not reversed?

Failure to reverse ITC attracts demand of the reversal amount plus interest at 18% p.a. and potential penalty under Section 73/74 of the CGST Act.

Is reversed ITC permanently lost?

Not always. For 180-day reversal, if you subsequently pay the supplier, you can re-avail the ITC in the month of payment.