1. whether interest is still applicable on itc reversal after 180 days? if yes then what is rate of interest? 2. whether itc be reversed fully or proportionately in case of partly payment?
Yes, but not as per 50(3), rule 37(3) tells that interest shall be payable as per 50(1) not as per 50(3) which is @ 18%. See bare act it is said as interest shall be sub-section 1 of sec 50.
3] A taxable person who makes an undue or excess claim of input tax credit under sub-section [10] of Section 42 or undue or excess reduction in output tax liability under sub-section [10] of Section 43, shall pay interest on such undue or excess claim or on such undue or excess reduction, as the case may be, at such rate not exceeding twenty-four per cent., as may be notified by the Government on the recommendations of the Council.
Means when you have taken wrong credit or when ITC has to be reverse under law the intt. payable is 24%
And As per 50(1) if tax liability or output liability is not paid in time the intt. rate is 18%
Hence in this case the ITC being reversed so rate of intt. will be 24%
See the act if the payment to supplier if not made within 180days as per rule 37(3) interest will be payable @ 18 as sec 50(1). It is written in the act.
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