TaxTMI 
TaxTMI 
Due to auto reflect in ITC setoff in GST portal, we are mistaken to utilize cash and keep balance in credit ledger. Moreover since GSTR-3B is cannot be amended and in case ITC reversal, can interest be levied, if there is sufficient balance in cash ledger ?
ITC reversal
16 Jul 2023 
7 Replies 
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Interest on reversed input tax credit remains payable despite sufficient cash ledger balance, requiring reversal or voluntary payment.
Mistaken utilization of Electronic Credit Ledger for outward tax when cash ledger had sufficient balance creates an overdraft reflecting un-reversed or ineligible Input Tax Credit; the taxpayer must reverse the ITC in a subsequent GSTR-3B by reducing eligible ITC or pay the liability (and interest) from the cash ledger, or make a voluntary payment via Form DRC-03. Interest on the wrongly availed/utilised ITC is payable irrespective of cash ledger balance. (AI Summary)
Mistaken utilization of Electronic Credit Ledger for outward tax when cash ledger had sufficient balance creates an overdraft reflecting un-reversed or ineligible Input Tax Credit; the taxpayer must reverse the ITC in a subsequent GSTR-3B by reducing eligible ITC or pay the liability (and interest) from the cash ledger, or make a voluntary payment via Form DRC-03. Interest on the wrongly availed/utilised ITC is payable irrespective of cash ledger balance. (AI Summary)