GST ITC CREDIT REVERSL - INTEREST RATE % GUIDANCE

[venkataraman swaminathan]

Dear Sir

We availed GST ITC Credit in JAN 20 .

One of our vendor's GST no found as canceled status in Portal and we noticed this now and we discussed with vendor and he agreed to give back the GST charged in his invoice by cheque & we need to reverse this ITC in our books and also to be reported in GSTR-3B return as reversal of ITC credit along with Interst in May 2020 GSTR-3B in June20 . For this type of reversal of ITC credit at what rate interest to be calculated and from which date . Need Guidance please.

thanks

v Swaminathan

AI Summary

Debate on GST ITC Reversal Interest Rate: Is It 24% or 18%? Sections 42(10), 43(10) in Focus. A query was raised regarding the reversal of Goods and Services Tax (GST) Input Tax Credit (ITC) due to a vendor's GST number being canceled. The discussion focused on the applicable interest rate for such reversals. According to Section 50(3) of the CGST Act, 2017, the interest rate for undue or excess ITC claims is 24%, as per Notification No. 13/2017. However, some experts argue that the interest rate should be 18% unless the unmatched credit is reclaimed before the supplier files a valid return. The applicability of Sections 42(10) and 43(10) remains contentious due to technical issues with the GSTN Portal.