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Reversal of input tax credit

RAHUL (Student) (206 Points)

20 June 2020

what is the procedure or steps to reverse the itc wrongly claimed..?

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10 Replies

David (article Assistant) (1621 Points)
Replied 20 June 2020

Hi Rahul, you can reverse the ITC Wrongly claimed in next GSTR 3B Return.
In the input tax tab, you can give the amount in ITC reversed column.. Interest you can shown In interest and late fee column.

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RAHUL (Student) (206 Points)
Replied 20 June 2020

What is the interest and late fees rate?

Hemal Makwana (Designation) (771 Points)
Replied 20 June 2020

@ david, why late fee will be levied in case of reverse of wrongly claimed ITC.

@ rahul, in case such wrongly availed ITC have been utilised then you will be liable to pay interest @ 18% from the date of availment.

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David (article Assistant) (1621 Points)
Replied 20 June 2020

@ Hemel, There is no late fee for Wrongly claimed ITC... I mentioned that interest should be shown in interest and late fee column.

yash (accountant) (519 Points)
Replied 20 June 2020

@ Hemal, Interest @ 18% is for non payment of tax.In case of wrong availment of ITC Interest @ 24% applied.

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Hemal Makwana (Designation) (771 Points)
Replied 20 June 2020

Can you please share the relevant section and i would request you to understand the scenario when it's 24% is levied.

David (article Assistant) (1621 Points)
Replied 20 June 2020

18% is right. 24% apply only when excess claim of ITC

RAHUL (Student) (206 Points)
Replied 20 June 2020

For example if i have Rs.2 lacs (cgst 1 lac and sgst 1 lac)itc which includes wrongly taken itc of Rs. 40k(cgst 20k & sgst 20k). And my output liability is only 50k. so by setting off i don't have any liablity to pay. So how can someone say that i have utilised the wrongly taken itc.??

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KRISSHNAN KP (4215 Points)
Replied 21 June 2020

At present there is no excess utilised ITC

David (article Assistant) (1621 Points)
Replied 21 June 2020

@ Rahul, here is this case you are not utilised the ineligible ITC. There is no issue. However you have to shown it in the GSTR 3B return and reverse the ineligle ITC...

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