Neha Verma 05 December 2019
i have claimed excess itc in 2017-18 by purchase bill entered twice wrongly. but not utilized it for any output tax liability. now i reversed it through dec03 in november 2019 is interest applicable on it (excess itc)
narendra (Accountant) 06 December 2019
As per Section 40(2) of CGST Act, interest is NOT payable on ITC claimed in excess (as per Section 50(3) of the CGST Act) if the same is Not utilised for setoff of output tax liability.
A good article is available on Ta_gur_ if you look for "Interest on irregular availment of ITC under GST" on the internet (..read from 5th para onwards).
Pankaj Rawat (GST Practitioner) 07 December 2019
Yes interest is applicable @ 24% even though the same being not utilised , but as per Section 41 of CGST Act the eligible ITC only can be credited to ECL. & moreover , Section 50(3) of CGST Act stating The interest applicable the person makes undue or Excess claim of ITC.
Hence , Interest is applicable