TaxTMI 
TaxTMI 
We have received notice from GST stating we have claimed ineligible ITC. But the ITC claimed is for capital goods business purpose ( Buying commerical vehicle for Goods Transport ( GTA Service) ). Along with interest for 3 years. Also Penalty of 10% for the Excess ITC. Not sure what to do now.
Intimation of tax ascertained as being payable under Section 73(5)/74(5)
11 May 2025 
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Ineligible input tax credit on commercial vehicles prompts verification of GTA usage, documentation, and challenge to interest and penalty.
Notice alleges ineligible Input Tax Credit on commercial vehicles used for Goods Transport Agency services, triggering issues of ITC eligibility, mixed use apportionment, compliance with forward charge declaration formalities, and correctness of interest and penalty levies. The operative response is to verify factual use, collate purchase invoices and transport agreements, confirm submission of the prescribed declaration form for forward charge, request recalculation of interest, seek waiver or reduction of penalty if claimed in good faith, and request a personal hearing while considering tax counsel involvement. (AI Summary)
Notice alleges ineligible Input Tax Credit on commercial vehicles used for Goods Transport Agency services, triggering issues of ITC eligibility, mixed use apportionment, compliance with forward charge declaration formalities, and correctness of interest and penalty levies. The operative response is to verify factual use, collate purchase invoices and transport agreements, confirm submission of the prescribed declaration form for forward charge, request recalculation of interest, seek waiver or reduction of penalty if claimed in good faith, and request a personal hearing while considering tax counsel involvement. (AI Summary)