Reversal Of Input

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ABHISHEK SURANA

27 Points Posted on 15 May 2020

We have enter Purchase amount in input coloum IGST of 3B return of July 2017 which was 1.2 crore rs., we were not ware about the reversal of wrongly taken Input credit, we deposit tax according 3B via challan ,but system offset liability was offset from khat credit ledger, amount deposited in cash ledger was unutilized and increase gradually month by month, , finally we make adjustments in feb 2019 3B return and remain input reversed and complete and remain was adjust with cash ledger,

we paid tax according to return but technical make mistake In liability offset,

is interest will be applicable on up to the
wrong Input credit from aug 2017 to march 2019 on whole amount 1.20 crore

date of reversal (

Replies (6)

Quick Summary

This discussion addresses a scenario where input tax credit was wrongly availed and subsequently reversed. The core issue is whether interest is applicable on the 1.2 crore INR credit from August 2017 to March 2019. Experts confirm that interest is indeed applicable from the date the credit was wrongly taken until its final reversal, as per Section 50(1) of the CGST Act, at a rate up to 18% per annum. While a genuine clerical mistake and lack of malafide intention might be grounds to appeal to the department, the substantial amount necessitates consultation with an experienced GST expert.

Pankaj Rawat

GST Practitioner

55067 Points Posted on 15 May 2020

Yes Interest is applicable from the date of wrong credit availed till finally Reversed.

sukhwani keyur

588 Points Posted on 16 May 2020

As per Sec 50(1) of CGST Act 2017 , Every person who is liable to pay tax in accordance with the provisions of this Act or the rules made there under, but fails to pay the tax or any part thereof to the Government within the period prescribed time , shall for the period for which the tax or any part thereof remains unpaid, pay, on his own, interest at such rate, not exceeding eighteen per cent, as may be notified by the Government on the recommendations of the Council.”

Therefore you have to pay interest @ 18%p.a.

ABHISHEK SURANA

27 Points Posted on 16 May 2020

Any benefit of (not a malafide) intention, will avail bcoz it was a clarical mistake , and GST was a new act at the time and everyone was not aware the treatment of mistake, dealer has not file any return before deposit tax ,but not set off through cash ledger, bcoz a big demand of interest 20 lac may be arise

sukhwani keyur

588 Points Posted on 16 May 2020

If you paid tax genuinely and it was not a malafide intention (genuine clerical mistake) then I think you can request and prove the department or always challenge the department if the department has issued notice. As the amount is substantial you should appoint and consult personally some experienced GST expert in the industry.