Ahmedabad: GST return filing is set to become more system-driven from the July 2026 tax period, with govt moving to auto-populate and lock Input Tax Credit (ITC) reporting in GSTR-3B. The change is expected to reduce manual intervention in ITC claims and limit the scope for post-filing adjustments.Under the proposed framework, ITC details in Table 4 of GSTR-3B will flow directly from GSTR-2B and portal-based tools such as the Invoice Management System (IMS). Once populated, taxpayers will not be able to modify the figures within GSTR-3B, making supplier reporting accuracy crucial to a buyer’s monthly ITC eligibility.“Taxpayers will no longer be able to manually increase, reduce or adjust eligible ITC within GSTR-3B,” said CA Karim Lakhani. “If an invoice is missing from GSTR-2B because a supplier failed to upload it correctly in GSTR-1, the buyer’s ITC will not be available for claim in that month’s GSTR-3B. The implementation of the proposal has been finalised and will be notified soon,” said Lakhani.Alongside ITC hard-locking, the correction mechanism for outward supplies is also being tightened. Errors in GSTR-1 will have to be amended through GSTR-1A, and the correction window will be time-bound. It will open after GSTR-1 is filed and close immediately once GSTR-3B is submitted for the same period, effectively eliminating any revision route after GSTR-3B filing.The combined changes are expected to have a direct cash-flow impact on businesses dealing with non-compliant vendors, tax consultants said. Where suppliers delay filing returns or upload incorrect invoice details, buyers may find ITC blocked for that month, increasing GST outgo and potential interest exposure if mismatches are detected later. Firms with large vendor bases and frequent transactions are likely to face heavier reconciliation workloads as monthly matching becomes a pre-filing requirement.CA Deep Thakkar, co-chairman of the indirect tax committee of the Gujarat Chamber of Commerce and Industry, said, “The proposed hard-locking of Table 4, specifically ‘All Other ITC’, is a significant step aimed at enhancing transparency and improving the integrity of the ITC mechanism.”Thakkar also flagged preparedness concerns among smaller enterprises, noting that many MSMEs continue to face challenges due to limited technical capacity and compliance resources. He added that the long-term benefits could include tighter controls against fake invoicing and improved supplier discipline, but the transition would require adequate outreach and support to prevent unintended hardship.
