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Regarding penalty for claimimg excess itc.

09 May 2021

Is there any harsh penalty apart from fine like cancelation of my registration if I have claimed excess of ITC in case when I have supplied goods but the vendor has not uploaded the invoice of those goods and time period has been lapsed.

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10 Replies

CA. Sourav Sarkar (Chartered Accountant ) (24578 Points)
Replied 09 May 2021

In case of excess ITC you have taken then you should reverse such ITC.

Otherwise Availing Input Tax Credit based on wrong Invoice Rs. 10,000 or 100% of ITC wrongly availed, whichever is higher + 24% Interest from date of availment to date of reversal Input Tax Credit (ITC) is backbone of GST structure.

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Lotus Agrawal (Practice) (1356 Points)
Replied 09 May 2021

In this case you have to reverse your itc along with interest.

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CA. Sourav Sarkar (Chartered Accountant ) (24578 Points)
Replied 09 May 2021

Agreed

Aarchi Jamuar (13 Points)
Replied 09 May 2021

Thank you sir, but is there any chances that my registration can be canceled for this?

CMA Poornima Madhava (CMA) (13097 Points)
Replied 09 May 2021

No. I don't think the registration can be cancelled without giving you an opportunity of being heard (according to the principles of natural justice).

Further, after initiating recovery proceedings against the supplier, the department can recover tax from you, in case the supplier does not pay tax to the govt

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