ITC WRONGLY TAKEN AND THEN REVERSED

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This query is : Resolved

Quick Summary

A user mistakenly claimed Input Tax Credit (ITC) of ₹1.60 lakh IGST and used ₹12,000 towards CGST/SGST liabilities. After reversing the ITC, they are concerned about interest. The advice suggests an 18% interest rate on the utilised ₹12,000, with a 24% rate potentially applicable only for mismatches under specific sections.

CA Amit Kumar

CA Amit Kumar (Querist)

14 August 2020 In October 2019 I mistakenly took ITC of 1.60 lakh of IGST and used in total rs.12000 for the liability of CGST and SGST in October and November, in December I reversed 1.60 lakh, out of which i had remaining credit of 1.48 lakh IGST and remaining 12000 with cgst credit... will there be any interest liability on me?

Udaya Chandran

Udaya Chandran (Expert)

14 August 2020 You need to pay interest @ 24% on the utilised amount of Rs.12000/-

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Lekhraj sood

Lekhraj sood (Expert)

15 August 2020 Rate of interest applicable will be 18% to the extent of utilisation .i.e.Rs.12,000/-. Interest @ 24% applicable only in case of mismatch under section 42/43.

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