ITC WRONGLY TAKEN AND THEN REVERSED

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This query is : Resolved

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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)
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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)
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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)
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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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