100% Credit availed in ER-1 of Capital Goods

[Prashant patra]

Dear Sir

We have wrongly taken & shown the 100% capital goods credit in ER-1 return for the month of june-2012

Kindly suggest whether we need to pay interest & how much is it.

Thanks

Prashant

[JAMES PG]

You have to reverse the credit of 50% and pay interest @18% from the date of taking credit till date of reversal

[YAGAY andSUN]

No need to pay the interest if you had availed the CENVAT credit but not utilised.  This aspect has been clarified in the Budget 2012.

AI Summary

Mistaken Capital Goods Credit Claim: Reverse 50%, Pay 18% Interest if Utilized; No Interest if Unutilized per 2012 Budget. A user inquired about mistakenly availing 100% capital goods credit in their ER-1 return for June 2012 and asked if they needed to pay interest. One respondent advised reversing 50% of the credit and paying 18% interest from the date of credit until reversal. Another respondent clarified that if the CENVAT credit was availed but not utilized, there is no need to pay interest, as explained in the 2012 Budget.