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SCN for Excess claim of ITC.

05 September 2022

SCN issued for excess ITC claimed along with interest payable. As per our books also excess ITC has been claimed in 3B. Have utilized also.

what would be reply for

Excess ITC : I need to reverse the same or need to pay in cash.

Interest: Rate of interest would be???

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9 Replies

APURBA CHATTERJEE (QUALIFIED CHARTERED ACCOUNTANT) (602 Points)
Replied 05 September 2022

If credit is available in ECL then reverse the same vide DRC 03, otherwise pay in cash.

As ITC is utilized so interest u/s 50(3) need to be paid.

3 Like

CA Rashmi Gandhi (Chartered Accountant) (86220 Points)
Replied 05 September 2022

Pay it through DRC -03 with 18% interest

6 Like

Pankaj Rawat (GST Practitioner) (55032 Points)
Replied 06 September 2022

Yea as per latest Rule 88B inserted by Notification 14/2022 ITC wrongly availed & utilized need to be pay with interest .
In my view the interest rate must be 24%
As the Finace Act 2022-23 Clause 111 being got effective retrospective from 01/07/22 , by Notification 9/22 CT
Clause 111 a new sub section (3) being inserted u/s 50 of CGST act & the rate of interest for ITC availed & uitilised is 24% .
As the interest rate in this case amended to 18% by amending notification 13/2017 CT under clause 115, 118, 121 , but these clauses are not being notified till date.

So need to pay 24% interest.

2 Like