Reversal of input credit wrongly taken


SIVAPRAKASH K   24 July 2019

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How reverse the input credit taken in gst return.
thanks

RAJA P M ("Do the Right Thing...!!!")     24 July 2019

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Elaborate with more details...

SIVAPRAKASH K   24 July 2019

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we have wrongly taken input gst on car purchase. want to reverse the same as we are not eligible for it. Thanks

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Jishad T (GSTP)     24 July 2019

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table 4(b) in GSTR3B

  ITC Reversed   (2) others

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CA ABHAY GUPTA (Practice)     25 July 2019

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table 4(b) GSTR3B
ITC Reversed
u/s 17(5)

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CA Saloni (Deputy Manager-Accounts & GST Consultant)     25 July 2019

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If this ITC is to be reversed with interest?

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CA ABHAY GUPTA (Practice)     25 July 2019

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When recipient has made an excess or undue claim of ITC as per section 42(10) of the Act, rate of interest applicable will be 24%.

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CA Saloni (Deputy Manager-Accounts & GST Consultant)     06 August 2019

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But sir, section 42 has not come into applicability. It talks about matching & reversing.

But matching can be enforced only through GSTR-2A which has not been notified yet.

So is there arises any question of interest.....

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CA Saloni (Deputy Manager-Accounts & GST Consultant)     06 August 2019

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If this is the case of 17(5), the supplier is giving us credit but we are not availing it due to ineligible credit. But by mistake we take it & reverse in subsequent period. Is interest applicable on reversal?

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Shorya (CA Article)     06 August 2019

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Section 42, also says that such "discrepancy" should be communicated to the supplier & thereby added to output tax liability along with 18% interest till the time supplier rectifies his return and such 18% interest is refunded.Practically, no such method of formal communication of discrepancies has actually been implemented under GST regime or even old service tax.

Let's say, hypothetically, recipient communicates supplier, the supplier has made no mistake, no such rectification made. Contravention of sub-section (7) gets attracted, you pay 24% interest on excess/undue ITC claimed.

To be on the safer side, it's better you pay such self-assessed interest to avoid penalties.


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