Is ITC reversed if Nil Refund is filed for a particular period?

Hi,

My client wants to claim a refund on ITC for the month of October 2019. Before that the client has never asked for a refund as she was using part of the ITC to pay her mothly taxes.

If we file nil refunds till September 2019 will the accumulated ITC till September 2019 be reversed to the government or does she still get to keep it to offset her future liabilities?

Please advice.

Thanks

Karan

 

 

Replies (3)
Quick Summary
This discussion addresses whether filing a nil refund for a specific period leads to the reversal of accumulated Input Tax Credit (ITC) to the government. The consensus is that if a refund is not claimed, the ITC balance can be carried forward and offset against future tax liabilities, rather than being reversed. This option is available as per the law, allowing businesses to retain their ITC for later use.

No refund of ITC laid down in Ledger except in certain cases
Refer to Sec.54

Please explain your query in detail

Hi,

Refund is due to inverted tax structure. Client can claim the refund. However if she chooses not to and files a nil refund what happens to the ITC?

Refund is the option given by law.

If you does not claim refund, the same can be off set against your future liability.

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