wrong availment of ITC and reversal thereof

[BalKrishan Rakheja]

A dealer availed ITC amounting to ₹ 5.25 Crore of CGST in the month of July 2017 as input tax credit without receiving the goods and also availed the same amount as transitional credit in the month of Sept 2017 in respsect of stock held with the excise invoices. As the ITC credit availed in the month of July 2017 was not available therefore he was asked to reverse the same immediateley. But he reversed the same in the month of February 2018 from the IGST Credit. Moreover he utilized this amount (wrongly credit availed in July 2017) for payment of duty of output tax in the month of October and November 2017. Now the question is:

1. whether he can reverse the same from IGST account, Hoever he availed CGST credit.

2. whether interest is not leviable.

3. whether penalty is not leviable as he not only availed the ITC wrongly but utilized the same also for payment of output tax also by way of fraud and willful misstatement .

4. whether he should not deposit this amount in cash account as the ITC availed wrongly was has already been used. if It was was not been availed by him in July 2017, then he was required to pay duty from the cash ledger in the month of October and November. However in this case he used the ITC availalbe in the credit ledger, in fact which was not available to him

AI Summary

Dealer Must Pay GST in Cash After Wrong ITC Claim; Interest and Penalties Applicable; Reversal from IGST Invalid A dealer wrongly availed input tax credit (ITC) of 5.25 crore in July 2017 without receiving goods and used it for output tax payments in October and November 2017. The ITC was reversed in February 2018 from the IGST credit. The queries raised include whether the reversal from the IGST account is valid, if interest and penalties are applicable, and if the amount should be deposited in cash. Responses indicate that the reversal from IGST is not permissible, interest and penalties are applicable, and the dealer must pay GST in cash. Additionally, a related case of fraudulent ITC claims involving a Chartered Accountant and an excise officer was mentioned.