Dear Team..
we import some of the materials and payment also done .GST ITC also taken on BOE .
But ITC not utilised.
now that materials was rejected ..materials also re exported..
in this case can reverse the ITC .any interest is applicable or not ..
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INTERST OF ITC REVERSAL
Replies (5)
Quick Summary
Interest must not be applicable if not used. Although the wordings of the GST law presently is unclear, and the amendment to Section 50 (yet to be notified), it specifically in relation to GST on delayed filing of returns. Although, the concept from the same could be utilised and challenged in court.
No interest liability
As per my view Interest on Reversal of ITC is not required since the ITC was "NOT UTILIZED".
Yes in case of Import (BoE) , IGST credit is available only when it is paid(RCM) , hence the ITC was never being Availed so Interest liability do not arise.
Hi Nayab,
When goods were re-exported, was it sent through Tax invoice under the cover of LUT. If yes, there may not be any requirement to reverse ITC.
Credit in relation to BoE need not satisfy payment to vendor, just the payment made to customs is sufficient for claim, therefore in my view interest issue does not arise.
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