INTEREST APPLICABLE ON ITC REVERSAL PORTION
This query is : Resolved
Quick Summary
20 April 2026
ITC was availed on capital goods purchased in December 2024. Now, ITC is required to be reversed in the March 2026 return. Is any interest applicable on the amount to be reversed? Also, what are the consequences if such ITC is not reversed or is reversed at a later date? Additionally, what are the consequences for the portion pertaining to the period from December 2025 to March 2026?
20 April 2026
Interest is not leviable merely because ITC on capital goods is being reversed in March 2026. Under section 50(3), interest applies only where ITC is wrongly availed and utilised. Hence, if the reversal is being made in the correct return when it became due, interest may not arise. However, if the reversal ought to have been made earlier and the credit remained utilised, interest can apply from the date of utilisation till reversal/payment, as per section 50(3) read with Rule 88B. Non-reversal or delayed reversal can also invite demand proceedings. If the case falls under annual Rule 43 final adjustment, separate interest provisions may apply from 1 April of the succeeding financial year.
21 April 2026
IN CASE REVERSAL, AM I REVERSE THE FULL ITC OR BALANCING PORTION. e.g., I AM LIABLE TO REVERSE Rs. 1,00,000 and i already utilised against sales tax Rs. 20,000. what amount should i reverse is it Rs. 1,00,000 or 80,000??
21 April 2026
CGST and SGST ITC has not been utilized throughout the period, but capital goods ITC was in IGST. Can CGST and SGST ITC be used for reversal in place of IGST ITC?
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Reopen of assessment proceeding
- Depreciation of fixed assets- coop housing society in mumbai
- TDS on Consultancy- Non DTAA
- Management System (IMS)
- Tax Audit u/s 44AB for Transport Business A proprietorship is engaged in transportation business and
- COMMERCIAL INVOICE FOR MATERIAL AND FREIGHT
- EPF FULL & FINAL RULES IN 2026
- Rental income gst and it purpose
- Gift Received from nonblood relative
- FTS Taxable under 115A
- Goods sold but invoice not issued
- Tally: Imported bank entries do not show up in manual reconciliation
- Sales of goods of amount Rs97 lakhs to a party
- Confused About My Career After 12th — Cyber Security, AI or Finance? Need Guidance
- STATUTORY AUDIT OF A SMALL PRIVATE COMPANY INCORPORATED ON 28.03.2025
- Guidance Needed: Linking Multiple Form 26QB Payments and Responding to ITD Defaulter Notice
- How to pay remaining amount of TDS after due date?
- Resigning a auditor from the company for misconduct
- RCM @ 5% on Hamali charges, Transport Charges, Unloading charges we take ITC or not
- CALCULATION OF DEFFERED TAX - OP BL IS DTL & CURRET IT DTA
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
