ITC Reversal

Reverse in GSTR-9 through DRC-03.

but how could be able to reclaim that ITC...

can claim now ..... as per Proviso to to Section 16 of CGST , you can claim the credit when the payment is made .
hence can claim credit when payment is made.

till today I have made all the payments of creditors in 2018 19, Now I need to reverse ITC in GSTR-9 of 2017 18 and re claim the credit in 2019-20 returns...?
If yes,
then why
because department will receive only interest so why I reverse and reclaim ITC..?

Because this act says Kindly read Section. 16 of CGST Act

Ideally you have to reverse in the month of March 2018. Since you have not reversed the same has to be given effect in gstr-9.

If we avoid doing that, in your case the exposure would be interest @ 24% for the amount of reversal to be made multiply by two months as you have made payment in may2018.

During assessment if department enquires then you might have this exposure but it would be resolved by way of litigation only.

If I had made the payment in may 2018 but not reclaim the ITC in may month because i had not reversed the same.
Now can I reverse the ITC in annual return and reclaim it in aug 2019 return..?

In my opinion you cannot.

Because GST Act will only support reclaim of ITC only when the assessee have followed the section 16.

Reversal in annual return is an after thought.

Reversing in annual return of FY17-18, making payment in FY18-19 and reclaiming it in FY19-20 will have its own challenges where you might end up loosing reclaim of ITC as it is not warranted by any provisions.

In my opinion, you should explain your hardship to officer and live with the risk of interest exposure.