GST ITC april 22

Interest is applicable only for the period of actual utilization (approx. 2–3 months until paid/reversed in June 2022) at 18% per annum, not up to today, provided the ledger balance or tax payments neutralized the wrong credit from June 2022 onwards.

Interest under Section 50 applies only for the period during which the wrongly availed ITC was actually utilised against output tax liability.

If your ledger showed a net balance throughout and the credit was reversed in June 2022, interest typically runs from the date the wrong credit was availed (April 2022) to the date it was reversed or when it no longer existed in the utilised portion of your ledger. This works out to roughly 2-3 months at 18% per annum.

Key distinction:
- ITC availed but NOT utilised: reversal required, but interest may not apply (GST Council position, though department sometimes disputes this)
- ITC availed AND utilised: interest at 18% from date of utilisation to date of reversal

For a 2022 notice in 2026, the department may also raise interest from the point of utilisation rather than availing. Check your electronic credit ledger history on the GST portal to confirm exactly when the credit moved from the credit register to outward payment.

For the DRC-03 voluntary payment process and how to respond to the notice, this [ITC reconciliation guide](https://taxgarden.in/blog/gst-2-itc-reconciliation-sme-pain-points-2026) has a step-by-step on calculating interest liability and responding to scrutiny.