ITC wrongly availed, Goods and Services Tax - GST

[Ankit TMI]

What are the interest and penal liability in case a supplier has wrongly availed CGST / SGST credit against IGST. However, the same has been reversed before utilisation. Kindly quote specific section that affects the said scenario.

Thanks

Posts / Replies

[YAGAY and SUN]

If interest @24% is paid along with reversal of ITC which was wrongly availed before issuance of SCN then there would be no penal actions initiated by the Department.

[Ankit TMI]

Thanks you sir for your response. Can you please help me out with exact provision which levy interest in such a scenario. Is your reply is in context of mismatch under Section 42 and Interest under section 50.

[YAGAY and SUN]

Our reply is in context with Section 50 of the CGST Act.

[Mahadev R]

Interest can be paid at 18% instead of 24%. Section 50(3) which states about excess or wrong claim of credit is applicable when 42(10 or Section 43(10) triggers. Presently there is no matching concept. So pay 18%. If there is subsequent demand, then we could pay differential 6% or litigate. there is no interest for delayed payment of interest

[YAGAY and SUN]

We endorse the view of Mr. Mahavir. 

[Ankit TMI]

Thanks for your time and valuable opinion. I analysed the provision thoroughly. However, i am unable to find an iinterpretation werein itc wronlgy availed but not utilised is subjected to levy of interest. It merely covers three scenario: first, tax payable has been paid belatedly, second, mismatch u/s 42, third, mismatch u/s 43. Thus i dont feel that interets in the present scenario could be levied

[YAGAY and SUN]

If you avail & reverse ITC then you would have to mention it in return and hence, Interest would be payable, accordingly.

[KASTURI SETHI]

Peruse Section 42(10), Section 43 (10), Section 50(3) along with Notification No.13/17-CT, dated 28.6.17 and 9/17 -CT dated 28.6.17 effective from 1.7.17.