Annexure B ITC eligibility: which invoices and reversals to include

Start with the invoices behind the ITC reported in your claim period’s GSTR-3B returns. Review each invoice’s eligibility, explain the reversals and then identify the amount that belongs in refundable Net ITC. A purchase-register total, a GSTR-2B total and a refund figure answer different questions.

This guide covers accumulated-ITC refunds for exports under LUT. For the two statements’ roles, start with Statement 3 versus Annexure B.

Should Annexure B contain every purchase bill?

Circular 125, paragraph 36, requires details of all invoices on which ITC was availed during the relevant claim period, with their eligibility declared. It does not turn every expense booked in your accounts into refundable credit. The current utility has separate invoice and reversal tables. CBIC Circular 125, GSTN advisory, 18 May 2026.

Build a complete purchase reconciliation first. From it, identify:

• Invoices feeding the period’s ITC, including credit subsequently reversed.
• Expenses without GST or without ITC availed: retain the explanation in your working rather than inventing a credit entry.
• Earlier invoices whose ITC was first availed in this period, supported by the applicable conditions.
• Reversals or reclaims relating to earlier periods, with their original invoice and return references.

Invoice date alone does not select the claim period. For ordinary supplier-reported invoices, current refund guidance requires the relevant GSTR-2B evidence from the claim period or an earlier period. The GSTR-2B period guide explains that check and import/RCM exceptions. Circular 197, paragraph 1.

Must each cost relate only to export customers?

No. Eligible business inputs and input services can support both taxable domestic work and exports. Rule 89(4) applies the export-turnover proportion to Net ITC; do not first remove the domestic share of an otherwise eligible common cost and then apply that proportion again.

Personal use, exempt supplies and blocked credit require their own eligibility review. They are different from having taxable Indian customers. CGST Act, sections 16–17, Rule 89(4), read with Notification 20/2024, clause 9.

Worked example: four different eligibility results

All figures below are invented. Assume these are the only ITC entries for an April–June 2026 claim, all tax is IGST, the documents and applicable GSTR-2B evidence are available, and there are no temporary reversals or reclaims.

The shared-service split has already been reviewed and documented: ₹4,500 tax relates to eligible business use and ₹1,500 to personal consumption. This is an assumed allocation for the example, not a statutory 75% allowance or a substitute for a Rule 42 calculation.

Purchase	GST in the working	Eligible ITC	Ineligible ITC	Refund treatment
Business software service	₹18,000	₹18,000	₹0	Input Services; include eligible credit
Shared service with reviewed personal-use component	₹6,000	₹4,500	₹1,500	Input Services; include only ₹4,500
Goods given as gifts, reviewed as blocked	₹1,800	₹0	₹1,800	Inputs; no refundable credit
Capitalised business equipment, otherwise eligible	₹7,200	₹7,200	₹0	Capital Goods; exclude from refund Net ITC
Total	₹33,000	₹29,700	₹3,300	₹22,500 Net ITC

Personal consumption and gifts are addressed by section 17(5)(g) and (h). For these assumed facts, the first and capital rows are No for blocked credit and Yes for eligible ITC. The shared-service row is Partially for both. The gifts row is Yes for blocked and No for eligible. CGST Act, section 17(5).

The utility distinguishes input category, blocked status and eligible/ineligible amounts. Selecting fully blocked credit automatically makes eligibility No. Retain the supporting allocation for partial entries. GST portal: Annexure B fields.

Capital credit is eligible here, but excluded because Rule 89(4) Net ITC covers inputs and input services. Do not label an otherwise eligible asset as blocked merely to remove it from the refund. See the capital-goods explanation and invoice-entry example.

I already reversed it in GSTR-3B. Why report it again?

Annexure B reports the reversal already made in the return; entering that information is not an instruction to reverse the credit again in another GSTR-3B.

In this example, assume GSTR-3B Table 4(A) includes ₹33,000, Table 4(B)(1) reverses ₹3,300 and Table 4(B)(2) is zero. Table 4(C) is therefore ₹29,700. The refund working removes the ₹7,200 eligible capital credit, leaving ₹22,500.

The alternative cross-check reaches the same figure directly: ₹18,000 + ₹4,500 eligible input-service credit. Subtracting ₹3,300 again from that ₹22,500 would duplicate the exclusion. These are reconciliation totals, not predictions of a particular utility cell. Circular 170, paragraphs 4.2–4.4.

Populate Annexure B’s reversal fields from the corresponding filed GSTR-3B figures. With multiple utility files, enter reversals only in the final file and zero in earlier files; review the consolidated result after all uploads. GSTN reversal instructions.

Keep gross tax, eligible amounts and reversals separately traceable. If the utility’s subtotal already reflects an exclusion, do not subtract it a second time in your own refund working. If portal totals disagree with the supported reconciliation, investigate the rows and calculation before filing; do not change actual reversal figures simply to force a match.

For temporary reversals, record when the condition is later satisfied. Current GSTR-3B instructions use 4(B)(2) for reclaimable reversals and 4(A)(5), with disclosure in 4(D)(1), for subsequent reclaims. That return treatment does not by itself establish a fresh refund entitlement: check the original claim history and relevant period. GST portal: current Table 4 instructions.

Finally, apply the export proportion and ledger limits to the supported Net ITC using the refund calculation guide. An accepted Annexure B upload is a technical check, not approval of the credit.