Interest on Un Utilized ITC in a regular/ Tran1

[Ravikumar Doddi]

Dear sir,

Is interest is applicable on the unutilized credit of TRAN1 which was disallowed by department or in a regular returns some times we may claim ITC erroneously

AI Summary

Interest Not Charged on Unutilized ITC Under GST, Section 50(3) Clarifies Rules on Late Filing Interest Applicability A discussion on a forum addressed whether interest is applicable on unutilized Input Tax Credit (ITC) under the Goods and Services Tax (GST). The consensus among contributors was that interest is not chargeable on unutilized credit, as per Section 50(3) of the CGST Act, 2017. The GST Council proposed that interest for late filing should apply only to net cash payable, but this has not been notified. A retrospective amendment disallows carry forward of Cess credit into GST, requiring reversal of irregular credit. Interest is only applicable if such credit is utilized. The forum included detailed legal references and interpretations.