- This article explains how to maintain and automate a Carried Forward ITC Register under GST.
- Includes manual and Power Query-based automation methods.
- Step-by-step examples with narration formats for Tally and Excel.
- Ensures proper compliance and helps claim all eligible ITC on time.
Carried Forward ITC / Pending ITC Register – A Must-Have in the GST Regime
The Carried Forward ITC or Pending ITC Register is an essential tool in the GST system. During the VAT regime, a similar register was used, but it wasn’t as critical as it is under GST. The primary reason? GST strictly tracks Input Tax Credit (ITC) through GSTR-2B, and any mismatch or delay in reflection can result in credit loss if not properly recorded and followed up.
📌 Why This Register Matters
This register helps you track:
- ✅ ITC that was eligible but not reflected in GSTR-2B at the time of filing, and now appears later.
- ✅ Why a specific ITC was carried forward – for example, due to mismatch, invoice not uploaded by supplier, or late GSTR-1 filing.
It is closely linked to your Input Tax Register, and typically contains:
- 📌 Previous month’s ITC not appearing in GSTR-2B earlier, but now visible — and therefore claimable.
- 📌 Current month’s ITC not reflecting in 2B — so it must be carried forward to the next month.
In essence, it acts as a bridge between GSTR-2B and your books of accounts, ensuring:
- No eligible ITC is lost due to time restrictions,
- Proper audit trail for ITC claims,
- Smooth reconciliation during assessments and scrutiny.
📌 Why C/F Register Became Crucial Post GSTR-2B & Rule 36(4)
When Form GSTR-3B began restricting ITC claims to only those reflected in GSTR-2B, the importance of a Carried Forward ITC Register drastically increased.
Let’s understand this transition better 👇
🔍 GSTR-2A vs GSTR-2B: Timeline of Provisional ITC Rules
🔍 GSTR-2A vs GSTR-2B
- A dynamic auto-drafted statement showing purchase data from GSTR-1, 5, and 6.
- Continuously updates as suppliers file or amend invoices.
- Useful for reference and audit, but not for final ITC claim post-2022.
🗟️ What is GSTR-2B?
- A static monthly statement generated after GSTR-1 due date (13th of each month).
- Introduced in August 2020 (for July 2020 returns).
- Becomes the legal basis for ITC claims in GSTR-3B from Jan 2022 onwards.
⚠️ Timeline of Provisional ITC Relief Rules
| 🗓️ Period | ✅ Provisional ITC Allowed | 🗞️ Legal Notification |
|---|---|---|
| Oct 2019 – Dec 2019 | 20% over eligible ITC | CBIC Notification 49/2019 |
| Jan 2020 – Dec 2020 | 10% over eligible ITC | Notification 75/2019 |
| Jan 2021 – Dec 2021 | 5% over eligible ITC | Notification 94/2020 |
| From Jan 2022 onwards | ❌ No Provisional ITC | Rule 36(4) Amended |
🧹 Why Was GSTR-2B Introduced?
- GSTR-2A was confusing and unreliable for final filing.
- Businesses faced difficulty reconciling ITC and explaining mismatches.
- GSTR-2B offers a stable snapshot — making compliance easier.
- Enabled stricter ITC blocking through Rule 86A for non-compliant vendors.
✅ GSTR-2A vs GSTR-2B Summary Table
| 🔍 Feature | 📄 GSTR-2A | 📄 GSTR-2B |
|---|---|---|
| Nature | Dynamic | Static |
| Usage | For reference only | Legal basis for ITC claim |
| Updates | Real-time | Monthly (fixed) |
| Claim Allowed | 20%, 10%, 5% extra | Strictly as per 2B (post-2022) |
| Introduced | July 2017 | August 2020 |
| Mandatory for ITC | ❌ Until Dec 2021 | ✅ From Jan 2022 |
🔍 Still confused about how Form 3B relates to ITC eligibility? Don’t miss our detailed post — Form 3B Filing Is Not Automatic: The Real Risk of Reconciliation.
📘 How to Link Tally with Excel for Carried Forward ITC Tracking – Step-by-Step Guide
🗒️ Why Do We Need This System?
Every business uses software like Tally to maintain accounting records. But under the GST system, especially after the introduction of GSTR-2B, Input Tax Credit (ITC) can only be claimed if the invoice appears in 2B.
Sometimes, your supplier delays uploading the invoice, and it doesn’t appear in GSTR-2B of the same month. In this case:
- ❌ You cannot claim ITC in that month.
- ✅ You have to carry forward the ITC to the next month.
- 📌 You must track these entries carefully to avoid ITC loss or audit issues.
So, we create a bridge between Tally and Excel using:
- 📂 A special ledger method in Tally
- 🧾 A clean and organized Excel register
- 🧷 A unique narration format to link both
🔗 Step-by-Step Process
✅ Step 1: Book the Invoice in Tally (Original Month)
Let’s say you received an invoice dated 15-Apr-2025 from ABC Suppliers.
- Book the purchase in Tally using the actual invoice date.
- Since it didn’t appear in GSTR-2B of April, don’t claim the ITC.
- Use ledgers like:
- C/F Input CGST
- C/F Input SGST
✅ Step 2: Add the Entry in Excel – Pending ITC Register
| Date | Party Name | Invoice No | GSTIN | Taxable | CGST | SGST | ITC Claimed Month | Narration Format |
|---|---|---|---|---|---|---|---|---|
| 15-Apr-25 | ABC SUPPLIERS | INV/001 | 22ABCDE1234F1Z5 | 1,00,000 | 9,000 | 9,000 | Not Uploaded | 15-04-2025 |
✅ Step 3: Wait for the Invoice to Reflect in GSTR-2B
If the invoice appears in May 2025, now you can claim the ITC.
✅ Step 4: Pass Journal Entry in Tally (Claim Month)
Voucher Date: 31-May-2025
Voucher Type: Journal
| Ledger | Debit | Credit |
|---|---|---|
| Input CGST | 9,000 | |
| Input SGST | 9,000 | |
| To C/F Input CGST | 9,000 | |
| To C/F Input SGST | 9,000 |
Narration:
15-04-2025 | ABC SUPPLIERS | INV/001 | 22ABCDE1234F1Z5 | 100000 | 9000 | 9000
✅ Step 5: Update Excel Sheet
| Date | Party Name | Invoice No | GSTIN | Taxable | CGST | SGST | ITC Claimed Month | Narration Format |
|---|---|---|---|---|---|---|---|---|
| 15-Apr-25 | ABC SUPPLIERS | INV/001 | 22ABCDE1234F1Z5 | 1,00,000 | 9,000 | 9,000 | May-25 | 15-04-2025 |
🌟 Final Outcome
- ✅ Invoice is recorded in books
- ✅ ITC is claimed only when eligible (as per GSTR-2B)
- ✅ Excel register keeps audit-ready tracking
- ✅ Tally and Excel are linked using structured narration
🛠️ Optional: Automate the Process Using Power Query
If you want to automate this Tally-to-Excel link, here's how:
🔹 What I Maintain
One Master Input Tax Register with:
- 📄 Current Month 2B ITC
- 📁 B/F ITC (now reflected)
- 🔄 RCM ITC
- ♻️ Reclaimed ITC
🔍 Power Query Logic (Simplified)
| Step | Action | Purpose |
|---|---|---|
| 1 | Load folder using Folder.Contents() |
Reads all exported Excel files |
| 2 | Open each file as a workbook | Access data inside |
| 3 | Filter only "Table" objects | Skip named ranges/sheets |
| 4 | Combine all tables | Create one large dataset |
| 5 | Set correct column types | Ensure dates and numbers are clean |
| 6 | Calculate Taxable Value | Add total purchase value from columns |
| 7 | Reverse GST signs | Make credits positive |
| 8 | Add Total GST column | Sum of CGST + SGST + IGST |
| 9 | Match GSTIN from Ledger master | Fill missing GSTINs |
| 10 | Filter for GST ledgers only | Remove non-GST entries, RCMs |
| 11 | Split Narration column | Extract invoice details |
| 12 | Rename columns & merge into Master Register | Ready-to-use for reconciliation |
💭 Want to skip the coding?
Use the manual method above. But if you want to automate, this Power Query method saves up to 80% time in reconciling ITC.
📥 Frequently Asked Questions (FAQs)
🧾 1. When can I claim ITC if the invoice doesn’t appear in GSTR-2B?
You can only claim ITC in the month when the invoice is reflected in GSTR-2B, as per Rule 36(4). If the invoice appears late, carry forward the ITC and claim it in the correct month using a Pending ITC Register.
💰 2. Is provisional ITC still allowed in GST?
No. Provisional ITC (earlier allowed up to 20%, then 10%, then 5%) has been completely disallowed from January 2022. ITC must strictly match your GSTR-2B data.
🔁 3. Can I claim ITC later if the supplier files GSTR-1 late?
Yes. Once the invoice appears in GSTR-2B (even if it relates to a past month), you can claim ITC in that current filing period. Maintain a proper Carried Forward ITC Register to avoid missing it.
🔍 4. What is the difference between GSTR-2A and GSTR-2B?
- 📌 GSTR-2A is a live statement that updates daily.
- 📌 GSTR-2B is a static, monthly snapshot of ITC, generated after the GSTR-1 due date.
- 📌 Only GSTR-2B is valid for ITC claim from Jan 2022 onward.
📊 5. What is the best way to track pending ITC manually?
Use an Excel register that includes columns like:
- Invoice Date
- Invoice No.
- Party Name
- GSTIN
- Taxable Amount
- Claimed Month
- Narration Format
You can link it with Tally using a structured narration for easy matching and audit trail.
⚙️ 6. Can I automate this using Excel and Power Query?
Yes! You can export Tally GST ledgers with narration and use Power Query to split and merge them into your Master Register — saving up to 80% of manual work.
🙋♂️ Need help setting up this automation for your business?
I’m happy to assist you! 📩 Just reach out via the Contact Page and I’ll personally guide you or set it up for your team.
📥 Want a ready-to-use format? Download and learn from our dedicated guide — GSTR-3B ITC Register Excel Format Guide.
🧾 Final Conclusion
The Carried Forward ITC / Pending ITC Register is no longer optional — it's a critical tool for every GST-registered business. With GSTR-2B restrictions and strict ITC rules, tracking unclaimed credits month-by-month is essential to avoid loss and penalties.
Whether you're managing it manually through Tally + Excel or automating it using Power Query, the goal is the same:
- ✅ Claim every eligible ITC at the right time
- ✅ Maintain an audit-proof record
- ✅ Simplify reconciliation with a smart system
If you’re serious about compliance and want to save hours every month — implement this register today.
📩 Need help automating it for your team? I’d be happy to assist. Contact me here.
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