Input reversal of 2017-18

[Nisha Prabhu]

Hi, if the registered entity does not have any output liability, has availed input during the year 2017-18. As there was no output, the same was not utilized. Now, it is identified that some of input is ineligible. Can the same be reversed in returns now? or need to pay along with interest in DRC showing in annual return GSTR-9/9C?

AI Summary

Guidance on Reversing Ineligible Input Tax Credits Without Interest Under CGST Act for 2017-18 Annual Returns A registered entity with no output liability during 2017-18 discovered ineligible input tax credits. The query sought guidance on whether to reverse these credits in returns or pay with interest. One respondent clarified that inadmissible credits could be reversed using DRC-03 in cash for annual returns, without interest, as the output liability was not reduced. Another respondent suggested that if the credit is reflected but not utilized, interest is unnecessary. The discussion referenced relevant sections of the CGST Act, indicating interest applies only if the credit is used. The consensus was that unutilized credits do not incur interest.