Interest on Reversal of ITC.

[PRAVIN TALEGAONKAR]

Dear All,

We have taken ITC during 2022-23 and now we want to reverse the same. We have ITC balance higher than amount to be reversed in credit ledger.

Now my question whether Interest is applicable on amount reversed during current month.

Regards,

Pravin Talegaonkar

AI Summary

Interest on Reversed Input Tax Credit: No Charges if Not Utilized, per Circular 192/2023 and Section 50(3) CGST Act. A discussion on a forum addresses the issue of whether interest is applicable on the reversal of Input Tax Credit (ITC) under GST. The initiator queries about reversing ITC taken in 2022-23, with a sufficient balance in the credit ledger. Respondents refer to Circular 192/2023 and Section 50(3) of the CGST Act, indicating no interest is due if ITC was not utilized. They emphasize maintaining a balance above the reversed amount in the Electronic Credit Ledger. The discussion also touches on reporting the reversal in GSTR-3B and references legal precedents and GST Council recommendations concerning interest on delayed returns.