Claiming of Reversed ITC

[NARENDER YARRAGORLA]

We have claimed FY 17-18 ITC in FY 2018-19, later reversed the ITC in FY 2019-20 by mistake, can reclaim the ITC now?

[KASTURI SETHI]

Once credit has been taken and reversed, time limit prescribed under Section 16 (4) of CGST Act will not apply. See Rule 37(4) of CGST Rules.

RULE 37. Reversal of input tax credit in the case of non-payment of consideration

" (4)  The time limit specified in sub-section (4) of section 16 shall not apply to a claim for re-availing of any credit, in accordance with the provisions of the Act or the provisions of this Chapter, that had been reversed earlier."

It is also applicable to the scenario in your query.

[NARENDER YARRAGORLA]

Thank you sir, for your response. I have not reversed ITC as per Rule 37(4) sir

[KASTURI SETHI]

SH.NARENDER YARRAGORLA JI,

Although you have not reversed credit under Rule 37(4), yet if credit once taken and reversed on your own, time limit specified under Section 16 (4) is not applicable. Have you taken credit in 17-18 within time limit ? What was the reason for reversal ? On which date was credit taken and on which date credit was reversed ? Whether you reversed on your own or being pointed out by the department ? Pl. clarify.

[Shilpi Jain]

Looks like credit would be eligible though you would have a dispute from the department since in 19-20 this Credit is not appearing in your GSTR-2A and as usual the department is going to deny the credit.

so it would not be an easy take.

Also As raised by Kasturi sir, it would Be a better advice if the reason for reversal is known

[Ganeshan Kalyani]

As explained by Sri Kasturi Sir the ITC is eligible. And as stated by Shilpi Mam there can be a query basis ITC taken in excess than in 2A. However it is a genuine case and reply can be given.

AI Summary

Reclaiming Input Tax Credit: Rule 37(4) permits re availal after reversal, but GSTR 2A mismatch may invite dispute. Reclaiming input tax credit that was taken and later reversed can be pursued because Rule 37(4) excludes the Section 16(4) time limit for re availing credit previously reversed; key factual matters include when credit was taken, why and when it was reversed, and whether reversal was voluntary or department driven. Expect departmental dispute where the credit is absent from GSTR 2A; gather documentary evidence and an explanation of reversal to substantiate eligibility and counter mismatch queries.