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Calculation of Interest on wrong Input Availed

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Amit Jain

Proprietor

538 Points Posted on 02 June 2022

Wrong Input Availed in Sept'2019 but the same has been unutilised till Oct'2020.

The Wrong Input utilised in the month of Nov'2020.

Now my question is

1) Whether we have to charge interest from Sept'2019 or Nov,2020

2) Under which section we have to reverse the amount

3) Financial Year to be selected

Replies (4)

Quick Summary

This discussion clarifies the calculation of interest on wrongly availed input tax credit (ITC). Interest is generally applicable from the date the input was utilised, not when it was wrongly availed if unutilised. The reversal process and relevant sections (like 50(3) and 73) for CGST, SGST, and Cess are also detailed, with specific guidance on the period for reversal in DRC-03.

CA Altamush Zafar

GST Consultant

15986 Points Posted on 02 June 2022

Interest payable from Nov 2020.

Interest payable under section 50(3).. Reversal to be made as per section 73

Financial years 2020-21 and 2021-22 and now 2022-23

Amit Jain

Proprietor

538 Points Posted on 03 June 2022

If we have utilised CGST & SGST Input but not utilised Cess amount. In this case how to reverse the wrongly availed input and which period to be selected for Cess reversal in DRC 03.