Respected sir / madam
If a TP availed ineligible ITC in 2020-21 and then complete ITC had been utilised.
Now, the said TP wants to reverse the said availed ineligible ITC. So, please guide whether he reverse the said ITC through ITC availed in 2022-23.
Is it wrong to reverse the ITC availed earlier with ITC availed later ? Please guide with provisions.
Taxpayer Can Address Ineligible ITC Reversal Using Electronic Credit Ledger Per Sec 49(4) & Rule 86(2) A taxpayer inquired about reversing ineligible Input Tax Credit (ITC) availed in 2020-21 using ITC from 2022-23. Expert responses clarified that the taxpayer can use the electronic credit ledger balance to address tax liabilities from the reversal of ineligible ITC per Sec 49 (4) and Rule 86(2) of the CGST. It was advised to use form DRC 03 for setting off the credit rather than reversing it directly in GSTR 3B. Both responses highlighted that such reversals would incur interest, payable in cash, from the date of the original credit utilization. (AI Summary)
TaxTMI 
TaxTMI 
TaxTMI 
