DRC 01 for Ineligible Credit

[RAGHAV SHARMA]

Hello Experts,

ITC on Motor vehicle is not claimed in GSTR-3B. Department issued DRC-01 on the basis that ineligible credit is not shown in GSTR-3B nor in GSTR-9. Is it valid to issue DRC-01 even for the ITC which is never claimed?

Kindly provide guidance on above matter

Thanks and Regards

Raghav

AI Summary

Ineligible input tax credit may trigger DRC 01 notices even if not claimed; reverse auto populated entries and substantiate non availment.
DRC 01 notices may be issued where supplier side records create auto populated ineligible ITC that does not appear as availed in the taxpayer's GSTR 3B; taxpayers should reverse such auto populated entries in Table 4 (B)(2) before filing, retain bill wise reconciliations and fixed asset records to prove non availment or capitalization, and present these documents to the officer to contest the demand.