ITC Reversal Of Common Credit

[Kaustubh Karandikar]

In case of reversal of ITC under Rule 42 on common credit taken against exempt as well as taxable supplies,the rate of interest payable on delayed reversal of common credit will be 18% or 24%?

AI Summary

Interest Rate on Delayed Reversal of Input Tax Credit Under Rule 42 Confirmed as 18% per Section 50(1) CGST Act. A discussion on the Goods and Services Tax (GST) forum addressed the interest rate applicable on delayed reversal of Input Tax Credit (ITC) under Rule 42, which involves common credit for both exempt and taxable supplies. The query sought clarification on whether the interest rate should be 18% or 24%. Two respondents confirmed that the applicable interest rate is 18%, referencing Section 50(1) of the Central Goods and Services Tax (CGST) Act, as specified in Rule 42 of the CGST Rules 2017.