UTILISATION OF ITC

[GAURAV SHARMA]

Mr. X has output of ₹ 50L & ITC of ₹ 30L in June.

Mr. X has NIL output & ITC of ₹ 40L in July.

By mistake Mr. X didn’t report his output liabilities in June GSTR-3B.

He rectified the same and reported his output in July GSTR-3B and adjusted the entire liability with ITC of June & July along with Interest.

Whether Mr. is correct?

Kindly advise.

AI Summary

Input tax credit utilisation: past-period tax liability cannot be discharged with subsequently availed credit; cash payment plus interest required.
The document addresses whether subsequently availed input tax credit may discharge a prior-period output tax shortfall. One view permits corrective adjustment if the taxpayer pays the tax due with interest and late fee; a contrary view insists eligibility conditions for ITC must be met in the earlier period, requiring cash payment for that period if credit was inadequate, and warns of departmental proceedings for improper retroactive utilisation.