Reversal of Input Credit interest and penalty is applicable

[MUNIRAJ SRINIVASAN]

Dear sir,

My client is wrongly availed input credit of ₹ 130000 for the month of Oct 2015 but he is not utilized the credit amount but next month Nov 2015 he was reversed the said amount department of Commercial Taxes put penalty and interest for said amount is applicable ? if any provision/ Case law is there ?

AI Summary

Client Reverses Mistaken Input Credit; Faces Interest and Penalty Despite Pre-Notice Correction Effort A client mistakenly availed an input credit of 130,000 in October 2015 but did not utilize it and reversed it in November 2015. The Department of Commercial Taxes imposed interest and a penalty. A participant suggested paying interest if the amount is nominal and noted that reversing the credit and paying interest before any departmental notice could prevent penalties. Another participant inquired whether the issue pertained to service tax or VAT and requested clarification on the state involved, suggesting it might be Karnataka VAT given the client's location in Bangalore.