Section for reversal of ITC
This query is : Resolved
02 December 2025
In case we are making both taxable and exempt supplies, whether the ITC on back-charges is required to be reversed under which Section ?
“If a wrong bill appears in GSTR-2B and ITC has been wrongly availed, whether the ITC is required to be reversed under Section?
“If a wrong bill appears in GSTR-2B and ITC has been wrongly availed, whether the ITC is required to be reversed under Section?
03 December 2025
Yes — when a registered person makes both taxable and exempt supplies, the Input Tax Credit (ITC) on common inputs/services (including back-charges) must be reversed proportionately under Section 17(2) of the CGST Act, read with Rule 42 of the CGST Rules
03 December 2025
If ITC is wrongly availed due to a wrong bill in GSTR-2B, it must be reversed under Section 16(2) of the CGST Act, since the basic eligibility conditions are not satisfied.
• If already utilized → reversal plus interest under Section 50.
• If only availed but not utilized → reversal required, but interest may not apply (as clarified in CBIC circulars and judicial rulings).
• If already utilized → reversal plus interest under Section 50.
• If only availed but not utilized → reversal required, but interest may not apply (as clarified in CBIC circulars and judicial rulings).
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