Changes in Table 4 of GSTR-3B

Table 4 of GSTR-3B — the section where every taxpayer reports Input Tax Credit (ITC) availed, reversed and net — has undergone a series of GSTN changes that fundamentally re-architected ITC reporting from 2022 onwards. With Union Budget 2026 reaffirming Section 16(2)(aa) and the GSTN's strengthened matching engine in 2026, getting Table 4 right is now central to avoiding DRC-01C intimations and provisional ITC denials.

The redesigned Table 4 architecture

• Table 4A — ITC available, gross, from various sources (imports of goods, imports of services, ISD invoices, RCM, all other ITC).
• Table 4B — ITC to be reversed: 4B(1) for permanent reversal (Rule 38, 42, 43, Section 17(5) blocked credits) and 4B(2) for temporary reversal (other reasons including ineligibility under Section 16(2)).
• Table 4C — Net ITC available (4A minus 4B), this is what flows to the electronic credit ledger.
• Table 4D(1) — ITC reclaimed which was earlier reversed in Table 4B(2) on satisfaction of conditions.
• Table 4D(2) — Ineligible ITC under Section 16(4) and ITC restricted due to PoS rules.

Why GSTN re-architected Table 4

The earlier Table 4 reported only net ITC, hiding the gross-vs-reversal trail that GSTN needed to enforce Section 16(2)(aa) — the rule that allows ITC only if it appears in the supplier-filed GSTR-1 and consequently in the recipient's GSTR-2B. By forcing gross-then-reversal-then-reclaim disclosure, GSTN can now run automated matches between books, 2B and 3B for every taxpayer.

The matching logic in 2026

1. Auto-population of Table 4A from GSTR-2B for the month — taxpayers can edit but every edit is logged and flagged.
2. DRC-01C intimation generated where ITC claimed in 3B exceeds 2B by more than the prevailing tolerance limit notified by CBIC.
3. Recipient must reply within 7 days explaining the difference; failure suspends ITC and may freeze the GSTIN.
4. Reclaim in Table 4D(1) is only valid where the same amount was previously reversed in 4B(2) — GSTN tracks the chronology.
5. Section 16(4) cut-off — ITC for FY 2025-26 must be claimed in 3B by 30 November 2026 or annual return filing date, whichever is earlier.

Common errors and how to avoid them

• Claiming ITC for invoices not yet in 2B because the supplier hasn't filed GSTR-1 — leads to a permanent loss if the supplier doesn't catch up.
• Treating ineligible credits under Section 17(5) as Table 4B(2) instead of 4B(1) — invites scrutiny.
• Forgetting Rule 42/43 proportionate reversal for exempt-and-taxable supply mixes.
• Reclaiming credits in 4D(1) without a clean audit trail to the original reversal.
• Missing the 180-day payment rule — ITC reversal under Rule 37 is automatic if the supplier remains unpaid.

Practical workflow for finance teams

1. Download GSTR-2B on the 14th of every month and reconcile to purchase register.
2. Identify mismatches and chase suppliers to file GSTR-1 corrections before 3B filing.
3. Classify each invoice as eligible / permanently reversed / temporarily reversed / blocked / reclaimable.
4. Populate Table 4 sub-rows accordingly; do not collapse details into 'All other ITC'.
5. Maintain a reclaim register tied to Table 4B(2) and 4D(1) movements.
6. Reconcile the electronic credit ledger to 3B monthly; any orphan credit is a red flag.

How the DRC-01C reply works

1. Login to GST portal and access the DRC-01C intimation in the dashboard.
2. Examine the difference between Table 4A of GSTR-3B and GSTR-2B for the relevant period.
3. Categorise the difference — supplier filing lag, GSTR-1 amendment in subsequent period, eligibility dispute, or genuine error.
4. Reply using Part B of the DRC-01C, attaching supporting documents and reconciliation working.
5. Where the difference is due to taxpayer error, pay the excess credit with interest using DRC-03 before the reply.
6. Failure to reply within 7 days suspends ITC and may freeze future GSTR-1 / 3B filings.

Year-end reclaim register

Build a structured reclaim register that tracks every Table 4B(2) entry: invoice number, supplier GSTIN, amount, reason for temporary reversal (180-day rule, 16(2)(aa) pending, Rule 37A) and target reclaim period. When the condition is satisfied — payment made within 180 days, supplier files GSTR-1, etc. — match the entry and reclaim under Table 4D(1) for the period. Without this discipline, reclaimable credits silently drift past the Section 16(4) cut-off and lapse.

Conclusion

Table 4 is no longer a single net-figure cell. It is a small audit trail of how every rupee of ITC moved from invoice to claim to reversal to reclaim. Build the reconciliation discipline now — monthly 2B matching, structured reversal taxonomy and a clean reclaim register — and DRC-01C will remain a curiosity rather than a recurring fire to fight.