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Excess ITC interest

suresh (Accounts executive) (108 Points)

14 May 2019

Hi all,
i have reversed Rs.21000 Excess ITC for fy 17-18 in the month of march'2019 return.how to calculate interest and how to pay in annual return 17-18. Pls advice me

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RAJA P M ("Do the Right Thing...!!!") (128101 Points)
Replied 14 May 2019

Calculate interest @ 24%p.a.

It's payable in GSTR 3B return in current situation.

GSTR 9 is only reporting purpose.

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suresh (Accounts executive) (108 Points)
Replied 14 May 2019

excess itc taken on nov'17 reversed in march 2019. for example excess itc 10000 how to calculate interest?

CA Haritha Komma (Chartered Accountant) (1147 Points)
Replied 14 May 2019

If the excess availed ITC is not utilised for payment of GST, then interest is not required to be paid. However, if the ITC is utilised then interest is payable @ 18% p.a as per section 50(1) of the CGST Act.

Interest is payable @ 24% as per sec 50(2) of the CGST act, wherein it refers to the mismatch of ITC as per sections 42 or 43 i.e., mismatch b/w ITC claimed and GSTR 2A (reflected when GSTR 1 is filed by vendor) & GSTR 2. At present, no such mechanism is in place as GSTR 2 is not made available.

Hence, 24% interest is not required at present.

RAJA P M ("Do the Right Thing...!!!") (128101 Points)
Replied 14 May 2019

Here Querist not asking with GSTR 2A... He ask excess ITC claimed in FY 17-18 GSTR 3B* and it will be reverse in Mar-19.
If excess claimed** ITC then interest is applicable.

Padmanathan Kv (2127 Points)
Replied 14 May 2019

@ Raja P M agreed on your view that interest is applicable. @ Suresh for your example interest will be 10000 * 24/100 * 17 months /12 months = 3400. You can pay via GSTR 9 itself

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RAJA P M ("Do the Right Thing...!!!") (128101 Points)
Replied 14 May 2019

The 24% Interest is applicable per annum. Then it's calculate as

10000*24%/365* no of days (which is claimed in the date of filling to revise date of filing).

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