TaxTMI 
TaxTMI 
A taxpayer did not pay 1%tax through cash. He paid 100% by ITC.
On being pointed out by department , he is ready to pay 1% by cash for earlier period.
What to do about 1% already paid by ITC ?
Because, it will be additional payment of 1% ?
1% payment through Cash Ledger
20 Feb 2022 
6 Replies 
3391 Views Asked by
ITC re credit permitted where cash payment is later made; claim refund under the statutory refund mechanism or adjust in the return.
If a taxpayer has discharged liability entirely through Input Tax Credit but is required to have paid a portion in cash, making the cash payment subsequently allows re credit of the utilised credit and a refund claim of the excess credit under the statutory refund mechanism. Alternatively, the taxpayer may rectify by short utilising ITC in a later periodic return (cumulative adjustment). Consideration must be given to procedural exceptions limiting utilisation when choosing between refund and adjustment. (AI Summary)
If a taxpayer has discharged liability entirely through Input Tax Credit but is required to have paid a portion in cash, making the cash payment subsequently allows re credit of the utilised credit and a refund claim of the excess credit under the statutory refund mechanism. Alternatively, the taxpayer may rectify by short utilising ITC in a later periodic return (cumulative adjustment). Consideration must be given to procedural exceptions limiting utilisation when choosing between refund and adjustment. (AI Summary)