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Regarding interest Waiver of reversal of unutalised ITC
The discussion concerns whether interest is mandatory when reversing unutilized ITC. Legally, the liability often hinges on whether the credit was merely claimed (available) or actually utilized. Due to the complexity and evolving nature of these rulings, seeking professional advice is highly recommended.
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Legal Basis: Under the GST law, interest is generally levied under Section 50 for the utilization of excess ITC. If the ITC was merely claimed in the return but remained unutilized, many taxpayers argue that there is no "undue benefit" obtained, and therefore, no interest should be payable upon reversal.
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Current Status: This remains a subject of ongoing litigation and discussion among tax professionals. Courts have issued varying rulings on whether interest applies to the mere availability of ITC versus the actual utilization of it.
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