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ITC reversal due to party charges 28 GST instead of 18

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paras

student

39 Points Posted on 05 October 2023

We received notice from the GST officer indicating that one of our creditors charged 28% GST on the bill instead of 18%, and we claimed a 28% Input Tax Credit (ITC) as it was the same as mentioned on the invoice and reflected in GSTR-2A. The payment was also made within 180 days. However, the officer now says that we are eligible for only an 18% GST ITC credit and that we need to reverse the 10% ITC credit with interest. Should we reverse the ITC or not ?

Replies (3)

Quick Summary

A business received a GST notice for claiming 28% Input Tax Credit (ITC) when their creditor only charged 18% GST. Despite the invoice and GSTR-2A reflecting 28%, the officer insists on an 18% ITC, requiring a reversal of the 10% difference with interest. The discussion explores whether to reverse the ITC, seek a credit note from the vendor, or if interest is payable if the ITC wasn't utilised.