Igst input availed but not utilised

This query is : Resolved

Priyanshu Goel (Querist)
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30 September 2021 We have wrongly taken the igst input in the month of july 2017 which has been reversed on December 2017 but the full amount has been unutilised during the period. (Sales/ turnover figure has been wrongly entered in the igst input head under 3b)

Gst department has issued notice for the interest payment during the period

Please provide any solution. very high amount has been demanded as interest

Thanks in advance

Udaya Chandran

Udaya Chandran (Expert)
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30 September 2021 Recently GST council has decided not to levy interest on ITC being availed but not utilised. Notification in this regard is being expected.

Moreover, Act provides provisions to levy interest only in case the liability reduced/not paid.

Priyanshu Goel

Priyanshu Goel (Querist)
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04 October 2021 Thanks Mr Chandran.
Can you please explain the last line, levy of interest only in case the liability reduced/ not paid.
Whether it relates to my query as i have wrongly taken the input but not utilised a single penny of that input.
Thanks in advance.

Udaya Chandran

Udaya Chandran (Expert)
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05 October 2021 It means that only when the liability has been reduced the interest is applicable on such reduced liability. Input is not liability. Only when input is utilised against any liability, then interest shall be applicable. Since, you have not utilised ITC, merely availing the same in return doesn't trigger interest liability.

Priyanshu Goel

Priyanshu Goel (Querist)
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08 October 2021 Thank you very much Mr. Chandran
Can you please provide any section or case related with it.

Gst department is demanding interest under section 73 ( section 73 says availed or utilised)

Thanks

Udaya Chandran

Udaya Chandran (Expert)
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08 October 2021 You can refer to my article in the link: https://taxguru.in/goods-and-service-tax/interest-itc-wrongly-shown-gstr-3b-utilised-liability.html

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