Interest on reversal of itc and ITC amount paid

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This query is : Resolved

Quick Summary

If you've reversed IGST claimed in a previous GSTR-3B return in a later one, you'll likely need to pay interest. This interest is calculated at 18% per annum from the date of the original return to the date of reversal. You can pay this interest using Form DRC-03 on the GST portal, offsetting your cash ledger balance against the interest liability.

ARUN GUPTA

ARUN GUPTA (Querist)

25 October 2021 I had claimed igst in June quater gstr3B return. I have reversed in September 2021 gstr3B return? Shall I have to pay interest? How much days interest have to be paid and where in which form we have to pay the interest? I have already paid reversed igst amount by creating challan. Can I pay interest by creating challan on gst portal? Pl advise?

CA Altamush Zafar

CA Altamush Zafar (Expert)

26 October 2021 Yes interest has to be paid and calculation will be done as per days. Rate will be 18% p.a.. Can be paid through DRC-03

ARUN GUPTA

ARUN GUPTA (Querist)

26 October 2021 But i have deposited interest into cash ledger. How to transfer this amount to DRC-03?

CA Altamush Zafar

CA Altamush Zafar (Expert)

26 October 2021 Fill the form DRC-03 to create interest liability and offset the cash ledger with the interest. liability

ARUN GUPTA

ARUN GUPTA (Querist)

26 October 2021 IN FORM DRC-03 we selected voluntary option. Again many options are shown. Which to select? We have taken igst by mistake in June return but reversed in September return. How no of days will be calculated?

CA. Bhavik P. Chudasama

CA. Bhavik P. Chudasama (Expert)

26 October 2021 DRC-03 Voluntary u/s 73(5)

CA Altamush Zafar

CA Altamush Zafar (Expert)

26 October 2021 As for days the calculation will be the date of return to the date of return.

CA Altamush Zafar

CA Altamush Zafar (Expert)

26 October 2021 If you are having further problems you should take professional service/advice.

ARUN GUPTA

ARUN GUPTA (Querist)

26 October 2021 There are so many sections showing like 73(5).73(6) and others? What is meaning of u/s 73(5)?

ARUN GUPTA

ARUN GUPTA (Querist)

26 October 2021 No problem more in this regards

CA Altamush Zafar

CA Altamush Zafar (Expert)

26 October 2021 Section will be chosen according to the provisions contained therein. Kindly go through the sections to see the circumstances which matches best with your situation.

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