ITC ENTERED WRONGLY IN NIL RETURN

[Manali Sharma]

I am filing NIL RETURN of a client since 2017-18 , but in the F.Y. 2019-20 in GSTR-3B I have TAKEN ITC instead of NIL RETURN. what is the treatment for this?

Whether I will be liable to pay taxes?

[Ganeshan Kalyani]

Tax is payable on taxable supply. If you have any taxable supply then furnish the same and then take input tax credit. Further, pay net tax liability.

[Himansu Sekhar]

You can write to jurisdictional officer and reverse the same. Final correction will be in annual return

[KASTURI SETHI]

If your client deals in exempted outward supply only and there is no possibility of supply of outward taxable supply in near future, reverse the credit entry with out payment of interest. Credit reversed tantamounts to credit not taken, if not used.

[Ramesh Kothari]

You hv to pay the tax with interest

[Hasmukh Patel]

As per last High Court decision, if ITC is not utilized, then no require to pay interest on it. Only reverce ITC.

[Ganeshan Kalyani]

Sir, please mention the name of the case law for easy reference of our readers.

[Himansu Sekhar]

Commercial steel engg corporation. case =2019 (7) TMI 1452 - PATNA HIGH COURT. In this case the reversal of the credit in TRAN-1 was done. Hon'ble Court held that the ITC was not availed by the party by mere entry in the TRAN-1

AI Summary

User Seeks Advice on Rectifying Mistaken ITC Claim in NIL Return; Solutions and Case Law Discussed A user mistakenly claimed Input Tax Credit (ITC) in a NIL return for the fiscal year 2019-20 and seeks advice on rectification. Responses suggest various solutions: paying tax on taxable supplies and claiming ITC, contacting a jurisdictional officer for reversal, and reversing the credit without interest if only exempt supplies are involved. Some advise paying tax with interest, while others reference a court decision indicating no interest is required if ITC is not utilized. A case law from the Patna High Court was cited, addressing similar issues of credit reversal.