Input is claimed erroneously and not utilised during the same financial year.
Now I am reversing it after I get notice violation of 16(4).
I will have to pay interest on the same amount? if no, please suggest me circular no, notification no or press release.
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Interest may levy or not
Replies (3)
Quick Summary
Was the input utilised in any subsequent years?
If input is not utilized (your e credit ledger does not fall below the amount of wrongly claimed and availed ITC) then you need not pay any interest in view of section 50(3) read with rule 88B.
Wrongly availed ITC, not utilised:
• From 1 July 2017 (retrospective amendment by Finance Act 2022), interest under Sec 50(3) applies only on ITC wrongly availed and utilised. If the credit ledger balance never fell below the wrongly availed amount (Rule 88B), it wasn't utilised. No interest.
• Reverse it in the next 3B (Table 4(B)(2)), or via DRC-03.
• Penalty: none if reversed voluntarily before a notice.
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