How to rectify ITC claimed on vehicle repair

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This query is : Resolved

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A user wrongly claimed GST Input Tax Credit (ITC) on vehicle repairs and insurance for the 2019-20 financial year. They are seeking advice on how to rectify this error, as ITC on such expenses is not allowable under GST law. The user has available ITC credit and has not yet filed their September 2020 GSTR-3B, presenting an opportunity to reverse the wrongly claimed amount.

Vinod

Vinod (Querist)
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17 October 2020 Dear all,

During the year 2019-20, I claimed 23000 ITC on vehicle repair/insurance. But now I come to know that ITC on vehicle repair/insurance is not allowable under GST Law. Anybody please suggest me what to do next. I have near about 50000 ITC credit available during the month of September-2020 and have not filed GSTR-3B yet.

Please somebody help out me

Thanks

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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17 October 2020 Reverse the wrongly claimed ITC in September GSTR 3 b.

Vinod

Vinod (Querist)
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17 October 2020 Shall I file DRC-03 for reversing, somebody told me that is the suitable solution. Please advise.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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17 October 2020 DRC 03 not required adjust it against available credit while filling September GSTR 3 b. Such reversal allowed upto September GSTR 3 b.

CA PARTH SHAH

CA PARTH SHAH (Expert)
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19 October 2020 You can either reverse the credit by filing DRC-03 or Reverse the credit in Sept 2020 GSTR-3B.Both are correct. DRC-03 is more better option as it will avoid carry forward effect in Annual Return of FY 19-20.

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