ITC REVERSAL OF FAKE BILLS

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Discussion on reversal of ITC for FY 2022-23 where the supplier failed to deposit GST. Experts advised using DRC-03 with the option 'Voluntary payment before issuance of SCN' under Section 73, along with payment of applicable tax and interest.

MOHD SHAHID

MOHD SHAHID (Querist)

06 February 2026 Dear Experts, we want to reverse ITC of fy 2022-23 as supplier did not deposited tax. The department asking to reverse the itc by deposit in cash or through availabe ITC by DRC 03. The main pointis how to deposit through DRC 03, which option to choose from dropdown box such as mismatch or before issuance of SCN. KINDLY elaborate it. Thanks

Aashok Kumar Sharma online

Aashok Kumar Sharma

(Expert)

07 February 2026 For reversal of ITC of FY 2022-23 due to supplier non-payment, use DRC-03 and select “Voluntary payment before issuance of SCN” under Section 73 (unless fraud alleged). Pay tax and interest in cash to the extent ITC was utilized. Avoid selecting mismatch option. Proper filing protects against penalty escalation.

MOHD SHAHID

MOHD SHAHID (Querist)

07 February 2026 Very very thanks for prompt reply

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