Belated payment of GST against RCM

[phaniraju konidena]

Dear Experts,

During the FY 2017-18 (Aug, Nov and Dec) our liability against RCM, say total ₹ 100/- has been deposited and shown in our Electronic Cash Ledger. Unfortunately, we have not debited/declared the liability while filing the GSTR-3B for the respective months. Finally, we have found the mistake on our own and paid the same on 15.02.2020 at the time of filing GSTR-9C through by DRC-03 and not paid the ‘interest’ under Sec.50 till today. But we have availed and utilized the ITC as we have assumed that the liability has already been debited to the account of Govt. That means, we have utilized the ITC before making the payment against Rule 36(b) of CGST Rules. Our query is that –

Can the department demand us to reverse the ITC on the reason of availing before payment of tax to the govt.?

Can the department impose equal penalty under Sec.74 on the reason of irregular availment?

If we will pay the interest (as it compensatory in character), can the belayed payment of tax be regularized; it means that the belated payment be treated as in time payment?

Please clarify.

AI Summary

Business Corrects GST Filing Error from 2017-18; Debates Rise on Interest Payment and Potential Penalties Under Section 74 A business identified an error in its GST filings for FY 2017-18, where it failed to declare its Reverse Charge Mechanism (RCM) liability in GSTR-3B, despite having deposited the amount. The company corrected this in 2020 but did not pay the interest under Section 50. Experts on a forum discussed whether the department could demand a reversal of Input Tax Credit (ITC) and impose penalties under Section 74. Opinions varied, with some suggesting paying interest might mitigate issues, while others advised readiness for potential legal defense against ITC reversal and penalties.