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Big Change Introduced in GST Refund Filing Process

Annexure-B Offline Utility Introduced on GST Portal for Accumulated ITC Refunds

The GST Network (GSTN) has introduced a major change in the refund filing process for taxpayers claiming refund of accumulated Input Tax Credit (ITC). Earlier, taxpayers were uploading Annexure-B in PDF format while filing refund applications under certain refund categories. However, to improve automation, invoice-level verification, and system-based validation, GSTN has now launched a standardized Annexure-B Offline Utility in Excel format.

Going forward, taxpayers filing refund claims involving accumulated ITC will be required to furnish Annexure-B only through this prescribed offline utility. This update aims to bring uniformity in refund applications and enable validation of invoices directly with GSTR-2B data.

This is an important compliance change for exporters, SEZ suppliers, inverted duty structure claimants, and electricity exporters.

Refund Categories Where Annexure-B Utility is Mandatory
The new Annexure-B Offline Utility is applicable for the following refund categories:

Refund Category
Export of Goods/Services without payment of tax (Accumulated ITC)
Supplies made to SEZ Unit/SEZ Developer without payment of tax
Refund due to Inverted Tax Structure under Section 54(3)
Export of Electricity without payment of tax
Taxpayers filing refund claims under these categories must now upload Annexure-B through the

offline utility instead of PDF attachments.

What is the New Annexure-B Offline Utility?
GSTN has introduced an Excel-based offline utility where taxpayers are required to report invoice-wise inward supply details for which refund is claimed.

The utility requires detailed reporting:

HSN/SAC-wise
Category-wise
Invoice-wise
Tax amount-wise
Invoices must be bifurcated according to:

Inputs
Input Services
Capital Goods
This means a single invoice may now need to be split into multiple line items if it contains different HSN/SAC codes or different categories of inward supplies.

The utility also captures:

taxable value,
GST amount,
ITC reversal details,
blocked ITC under Section 17(5),
and Net ITC calculations.
Structure of the Annexure-B Utility
The utility contains two important tables:

Table 1 – Reversal Details
This table captures:

Rule 38 reversals,
Rule 42 reversals,
Rule 43 reversals,
Section 17(5) blocked credit,
and other reversals reported in GSTR-3B.
Table 2 – HSN/SAC-wise Inward Invoice Details
This table captures:

invoice-wise inward supplies,

HSN/SAC details,
tax values,
category of supplies,
and ITC claimed in GSTR-3B.
Major Compliance Change: Invoice Splitting Requirement
One of the biggest practical changes introduced through this utility is mandatory splitting of invoices.

If one invoice contains:

multiple HSN/SAC codes,
multiple supply categories,
or both,
then taxpayers must split the invoice into separate line items.

For example:
A single invoice containing:

Inputs,
Input Services,
and Capital Goods
cannot be reported in one consolidated row anymore.

Each line item should represent:

one HSN/SAC code,
and one category of inward supply.
The taxable value and tax amount must also be proportionately allocated.

This change may significantly increase data preparation work for taxpayers and consultants.

Duplicate Invoice Validation Introduced
GSTN has now introduced duplicate validation checks.

The system will validate invoices based on:

Supplier GSTIN

Invoice Number
Invoice Date
Category of Input Supply
HSN/SAC
If all these parameters are identical, only one line item will be accepted.

Multiple entries under the same parameters will trigger validation errors.

Therefore, taxpayers must carefully prepare invoice data before generating JSON.

GSTR-2B Validation Introduced
One of the most important changes is automatic validation of uploaded invoices with GSTR-2B.

After uploading the Annexure-B JSON file:

invoices will be matched with GSTR-2B,
valid invoices will appear in “Valid Documents” report,
mismatches will appear in “Invalid Documents” report.
This system-driven validation will significantly impact refund processing.

Special Relaxation for Old Period Invoices
GSTN has clarified an important relief for old invoices.

For invoices pertaining to:

October 2024 or earlier periods,
the portal will not validate them with GSTR-2B.

Although such invoices may display a generic “not validated” message, taxpayers can still proceed with refund filing.

This will not be treated as an error.

However, for invoices from:

November 2024 onwards,
full validation with GSTR-2B will apply.

Reporting of ITC Reversals
Taxpayers must correctly report ITC reversals while preparing Annexure-B.

The utility requires disclosure of:

Rule 38 reversals,
Rule 42 reversals,
Rule 43 reversals,
blocked credit under Section 17(5),
and other reversals reported in Table 4(B)(2) of GSTR-3B.
GSTN has also clarified that if multiple utility files are uploaded:

reversal values should be entered only in the final file,
previous files should contain reversal amount as zero.
The portal will then calculate consolidated Net ITC automatically.

Huge Upload Capacity Allowed
GSTN has allowed substantial upload limits in the utility.

Particulars Limit
Maximum entries in one utility file 10,000
Maximum utility files uploadable 25
Total line items allowed 2,50,000
If invoices exceed this limit:

remaining invoices can be submitted in PDF format as supporting documents.
This is especially important for exporters and large taxpayers having massive invoice volumes.

Important Technical Instructions Issued by GSTN
GSTN has issued several technical precautions for taxpayers:

1. Avoid Extra Spaces
   Leading or trailing spaces may cause:

validation failures,
JSON errors,
upload issues.
2. Do Not Modify JSON Directly
Once JSON is generated:

taxpayers should not edit it manually.
Any modification should be made only in the Excel utility followed by fresh JSON generation.

3. Do Not Rename JSON File
   Changing the JSON filename may create upload failures.
4. Use Correct Dropdown Values
   Copy-paste functionality is enabled, but dropdown values must exactly match prescribed values.

Even small deviations can trigger errors.

5. Close Old Utility Versions
   GSTN has advised users to completely close older versions of the utility before using the latest version to avoid processing problems.

Practical Impact on Taxpayers and Consultants
This change will significantly impact refund filing procedures.

Earlier:

taxpayers simply uploaded Annexure-B PDFs.
Now:

invoice-level structured reporting is mandatory,
HSN-wise bifurcation is required,
GSTR-2B validation applies,
JSON generation becomes compulsory,
and reconciliation work will increase substantially.
Tax professionals handling refund claims must now:

maintain proper invoice mapping,
reconcile GSTR-2B carefully,
track reversals accurately,
and prepare structured refund working papers.
Key Benefits of the New Utility
Despite increased compliance workload, the utility offers several long-term benefits:

✅ Faster system-based verification
✅ Reduction in manual scrutiny
✅ Standardized refund filing
✅ Better invoice reconciliation
✅ Improved transparency
✅ Faster processing of genuine refunds

Conclusion
The introduction of the Annexure-B Offline Utility marks a major step towards automation of GST refund processing. Taxpayers claiming refund of accumulated ITC must now shift from PDF-based Annexure-B filing to structured invoice-level reporting through the prescribed Excel utility.

This change will require:

stronger reconciliation processes,
better invoice management,
proper HSN/SAC mapping,
and accurate GSTR-2B matching.
Exporters, SEZ suppliers, and inverted duty refund claimants should immediately familiarize themselves with the new utility to avoid validation failures and refund delays.

Since invoice-level verification is now system-driven, accurate reporting will become the key factor for smooth GST refund processing in 2026.