Reversal of input credit wrongly taken



How reverse the input credit taken in gst return.
thanks
 
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"Do the Right Thing...!!!"

Elaborate with more details...
 
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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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GST Certification Course



table 4(b) in GSTR3B

  ITC Reversed   (2) others

 
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Practice

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

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Deputy Manager-Accounts & GST Consultant

If this ITC is to be reversed with interest?

 
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Practice

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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Deputy Manager-Accounts & GST Consultant

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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Deputy Manager-Accounts & GST Consultant

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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CA Article

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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