Reversal of input credit wrongly taken
SIVAPRAKASH K (20 Points)
24 July 2019thanks
SIVAPRAKASH K (20 Points)
24 July 2019
RAJA P M
("Do the Right Thing...!!!")
(126699 Points)
Replied 24 July 2019
SIVAPRAKASH K
(20 Points)
Replied 24 July 2019
CA Saloni
(Manager-Accounts & GST Consultant)
(5124 Points)
Replied 25 July 2019
If this ITC is to be reversed with interest?
CA ABHAY GUPTA
(Practice)
(3230 Points)
Replied 25 July 2019
CA Saloni
(Manager-Accounts & GST Consultant)
(5124 Points)
Replied 06 August 2019
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.....
CA Saloni
(Manager-Accounts & GST Consultant)
(5124 Points)
Replied 06 August 2019
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?
Shorya
(CA Article)
(105 Points)
Replied 06 August 2019
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.