TaxTMI 
TaxTMI 
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
Interest on Un Utilized ITC in a regular/ Tran1
16 Jan 2019 
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Interest on unutilised input tax credit: no interest on mere carry forward; interest applies if ineligible credit was utilised to pay GST.
Mere carry forward or unutilised availability of input tax credit does not attract interest because output liability is reduced only upon utilisation; interest arises where ineligible credit was utilised to discharge GST, producing a delayed tax payment that must be regularised with interest from the date of utilisation. Cess credits retrospectively disallowed must be reversed, with interest consequences depending on whether such credits were utilised. (AI Summary)
Mere carry forward or unutilised availability of input tax credit does not attract interest because output liability is reduced only upon utilisation; interest arises where ineligible credit was utilised to discharge GST, producing a delayed tax payment that must be regularised with interest from the date of utilisation. Cess credits retrospectively disallowed must be reversed, with interest consequences depending on whether such credits were utilised. (AI Summary)