What is a Carried Forward ITC Register in GST?

It is a register to track ITC that was eligible but not reflected in GSTR-2B. It helps businesses avoid missing out on valid GST credits due to delays or mismatches.

How to link Tally with Excel for GST ITC tracking?

Use Power Query in Excel to import voucher data from Tally and reconcile it with GSTR-2B data to identify pending ITC automatically.

Is this register mandatory under GST?

While not mandatory, it has become essential post-2022 for accurate ITC claims and audit readiness. It helps prevent ITC loss due to timing issues.

📅 Published on: July 5, 2025 | 🌀 Last Updated: July 14, 2025

✍️ Author: Amrut Chitragaar

📌 This post is for educational purposes only. Always consult a SEBI-registered advisor before making financial decisions.

👉 Full disclaimer here

📌 TL;DR – Quick Summary:
You must track pending ITC using a manual or automated register. Tally and Excel can be linked using narration format and Power Query to ensure every credit is claimed on time. Post-2022 rules make this mandatory. Avoid ITC loss!

🔁 Back to TOC

📚 Table of Contents

1. What Is Carried Forward ITC?
2. Practical Example + Table Comparison
3. How It Works with Tally + Excel + 2B
4. Journal Entry Format + Explanation
5. Register Format + Tally Narration + Excel Logic
6. Power Query Steps to Automate the Process
7. Audit Defence + Monthly Checklist
8. Final Thoughts + CTA

Carried Forward ITC / Pending ITC Register in the GST Regime

Carried Forward ITC Register – Track GST ITC Smartly Using Excel & Tally — Hero Image: Track & Claim GST ITC with Pending ITC Register using Excel and Tally

The Carried Forward ITC or Pending ITC Register is an essential tool in the GST system. Even in the earlier VAT regime, a similar register was used, but it wasn’t as critical as it is under GST. This register strictly tracks Input Tax Credit (ITC) through GSTR-2B, and any mismatch can result in permanent 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
✅ Why a specific ITC was carried forward – for example, due to mismatch, non-filing 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
📌 Current month’s ITC not reflecting in 2B — so it must be carried forward

📊 Practical Example – What Is Pending ITC?

Let’s take a real-world situation to understand this better. Imagine you are filing your GSTR-3B for July 2025. You open your GSTR-2B and see that some purchase invoices are missing, even though they were properly booked in Tally or Excel.

Here’s how you record and track those pending invoices:

Invoice No.	Supplier GSTIN	Invoice Date	Tax Amount	Reflected in 2B?	Status
INV-209	27ABCDE1234F1Z7	15-Jul-2025	₹2,500	❌	Carried Forward
INV-210	27ABCDE1234F1Z7	16-Jul-2025	₹1,800	✅	Claimed

In this case, you’ll carry forward INV-209 and check again in August’s GSTR-2B. If it appears, you claim it then — otherwise, it stays in the pending register until resolved or disallowed.

🧠 How This Works with Tally, Excel & GSTR-2B

The Carried Forward ITC Register is best maintained in Excel — but you must sync it mentally (or technically) with:

📘 GSTR-2B (to check what's eligible)
📒 Tally or your accounting software (to track what’s booked)
📊 Your Excel ITC Register (to track ITC movement & carry forward)

The idea is to:

✅ Reconcile 2B with Books every month
✅ Track invoice-wise ITC missing in 2B
✅ Update your pending register with clear reason (e.g., supplier not filed, wrong GSTIN, etc.)

This makes your credit claim fully defendable in audit, and saves you from future GST notices or ITC reversal.

📘 Journal Entry Format for Carried Forward ITC

When you carry forward ITC to next month, there’s no actual financial transaction — but it’s wise to pass a tracking journal entry in your books for audit clarity.

Here’s a simple journal entry you can use in Tally or Excel:

Particulars	Debit	Credit
Pending ITC – IGST	₹2,500	–
Input IGST	–	₹2,500

This clearly shows that the credit has not been claimed in the current month and is shifted to a pending ledger. In the next month, you can reverse this entry once it appears in 2B and is claimed.

Many businesses skip this entry, but for multi-branch or audit-sensitive setups, it's a good internal control.

📄 Format of the Carried Forward ITC Register

You can maintain the register in Excel with the following key columns:

📅 Invoice Date
📄 Invoice No. & Supplier GSTIN
💰 Tax Amount (IGST/CGST/SGST)
🔍 Reason for Carry Forward (e.g., not in 2B, supplier default)
📆 Month in which claimed (once eligible)
📝 Remarks / Follow-up notes

💡 Suggested Tally Narration Format

Use consistent narration while booking invoices in Tally. Example:

"ITC Not Reflected in 2B – Pending for August 2025"

This helps you filter such entries easily in Tally reports or when exporting to Excel.

📈 Excel Sheet Logic

Use conditional formatting or Power Query to highlight:

🟡 Invoices pending > 60 days
🔴 Invoices never appeared in 2B
✅ Auto-update status when claimed month is filled

This creates an active workflow without missing out on any pending credit.

⚙️ Power Query: Automating the Carry Forward Register

Cartoon showing accountant linking Tally to Excel with Power Query to automate GST ITC register — Image: Automate GST ITC Tracking by Linking Tally to Excel with Power Query – Learn With Amrut

If you're comfortable with Excel’s Power Query, you can automate tracking pending ITC from GSTR-2B vs Books comparison.

Here’s a simplified process:

📥 Import GSTR-2B JSON or Excel file into Power Query
📥 Import Purchase Register from Tally Excel Export
🔗 Merge the two tables based on GSTIN, Invoice No., and Tax Amount
❌ Filter rows where match is not found (these are pending ITC)
📤 Export that filtered list to your “Pending ITC Register” sheet

This way, you can reduce manual errors and speed up your monthly reconciliation. Once set up, it only takes 2 minutes to refresh!

If you don’t know Power Query, start with VLOOKUP-based comparison — then upgrade later.

🛡️ Audit Defence + Monthly Checklist

Maintaining a carried forward ITC register protects your business in case of:

📋 GST Department Notices
🔎 Internal or Statutory Audits
🚫 ITC Reversal Risk under Rule 37/Rule 42/43

During assessment, if ITC was claimed late or mismatched, your register becomes a clear proof of:

✅ Eligibility as per invoice
✅ Reason for delay in claiming (e.g., non-reflection in 2B)
✅ Actual date of credit availment (matching with books)

📅 Monthly Checklist to Avoid Errors

🔁 Reconcile 2B with Purchase Register
📌 Identify missing invoices & reasons
📤 Update Pending ITC Register
🧾 Review old entries for eligibility or disallowance
📌 Pass journal entries if necessary for audit tracking

This habit ensures no loss of credit and helps you confidently face any audit or GST scrutiny.

🎯 Final Thoughts

The Carried Forward ITC Register is not just a compliance formality — it’s a financial protection tool. Whether you use Excel or automation, what matters is discipline. Don't lose your Input Tax Credit just because a supplier missed filing or your accountant forgot to track.

👉 Maintain the register monthly. Review every pending entry. Educate your team. And most importantly, don’t blindly trust 2B — track your own books too.