ITC mistakenly claimed

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26 Points Posted on 24 May 2023
What to do if a supplier who is not eligible to claim ITC, mistakenly set-offs all his outward supply through ITC showing is credit ledger?
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On 24 May 2023 at 09:24 Report
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Quick Summary
If a supplier incorrectly claims Input Tax Credit (ITC) despite not being eligible, they must reverse this wrongly taken credit along with applicable interest. This can be rectified by paying the liability through DRC-03. Interest is calculated daily at 18% from the date of the incorrect claim until the liability is settled.

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GST Practitioner & Accounts
15146 Points Posted on 24 May 2023
You have reverse input tax credit wrongly taken with interest in GSTR3B .
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On 24 May 2023 at 09:53
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26 Points Posted on 24 May 2023
Sir, can we rectify this using DRC 03, by paying the liabilities today itself to save the penal interest on the outward tax liability.
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On 24 May 2023 at 15:25
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GST Practitioner
55067 Points Posted on 25 May 2023
Yes you . in GST interest is applicable day wise hence interest @ 18% will applicable from the date of wrongly claimed ITC till you file DRC 03 .
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On 25 May 2023 at 00:29
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Profession
28261 Points Posted on 25 May 2023
It's better not to take such input credit.Kindly reverse it.
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On 25 May 2023 at 06:51

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