ITC of Current Year to pay tax liability of PYs

[Awmtea Nups]

Can ITC of current FY 20-21 claimed during September 20 be used to pay liabilities of FY 17-18, 18-19 to be paid through DRC-03.

[KASTURI SETHI]

Yes. You can use so. Govt. is compensated by way of payment of interest for the delayed payment of tax.

[Ganeshan Kalyani]

One to one co-relation is not required. So, I am also of the view that ITC can be avialed to knock of previous GST liability.

AI Summary

Tax Credit from 2020-21 Can Offset Liabilities from 2017-18 and 2018-19, Say Experts; No Direct Correlation Needed. A user inquired if the Input Tax Credit (ITC) from the fiscal year 2020-21, claimed in September 2020, could be used to settle tax liabilities from fiscal years 2017-18 and 2018-19 through DRC-03. Two respondents affirmed this possibility. One noted that the government is compensated through interest for delayed tax payments, while the other stated that a one-to-one correlation is unnecessary, supporting the use of current ITC to offset previous GST liabilities.