TaxTMI 
TaxTMI 
Treatment of Unutilised ITC at the Time of GST Registration Cancellation
X X X X Extracts X X X X
X X X X Extracts X X X X
....reatment of Unutilised ITC at the Time of GST Registration Cancellation<br> Query (Issue) Started By: - vaibhav agrawal Dated:- 23-3-2026 Last Reply Date:- 1-4-2026 Goods and Services Tax - GST<br>Got 8 Replies<br>GST<br>At the time of cancellation of GST registration, after discharging the liability as required under Section 29(5) of the CGST Act, a balance of ITC still remain in the electronic c....
X X X X Extracts X X X X
X X X X Extracts X X X X
....redit ledger. What will be the treatment of such unutilised ITC balance? Will it lapse automatically upon cancellation, or is there any provision for its utilisation or refund? Kindly clarify. Reply By Raam Srinivasan Swaminathan Kalpathi: The Reply: Dear Querist Kindly refer to Section 45 r w r 81. The accumulated ITC will have to reversed in GSTR-10 the Final Return which is to ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....be filed within 3 months from the date of cancellation. By the by, if it is of any interest you, there was a perverse ruling by a single judge of the Sikkim High Court in SICPA India Pvt Ltd - 2025 (6) TMI 834 - SIKKIM HIGH COURT which allowed refund of the accumulated ITC. This decision was later reversed by a multi judge bench. Reply By KASTURI SETHI: The Reply: GST laws do not allow r....
X X X X Extracts X X X X
X X X X Extracts X X X X
....efund inasmuch as Section 16(1) allows availment of ITC for utilization only in the course or furtherance of business. Since your registration stands cancelled in accordance with GST laws, you are unable to utilize the balance of ITC. Hence, in this scenario, the balance of unutilized ITC would lapse. Reply By KASTURI SETHI: The Reply: IN FAVOUR OF PARTY 2025 (6) TMI 834 - SIKKIM HIGH COUR....
X X X X Extracts X X X X
X X X X Extracts X X X X
....T SICPA India Pvt. Ltd. Versus Union of India Reply By KASTURI SETHI: The Reply: IN FAVOUR OF THE DEPARTMENT 2025 (9) TMI 537 - SIKKIM HIGH COURT BISWANATH SOMADDER, CJ. and Bhaskar Raj Pradhan, J. Union of India Versus SICPA India Pvt. Ltd. Reply By KASTURI SETHI: The Reply: Compare the language of both judgements before ar....
X X X X Extracts X X X X
X X X X Extracts X X X X
....riving at your decision. Reply By Shilpi Jain: The Reply: Refund will not be eligible and utilisation cannot happen as you have cancelled the registration Reply By Shilpi Jain: The Reply: Though can you inform what is the reason for the ITC balance? Reply By vaibhav agrawal: The Reply: Machinery was bought 4 years ago never put to use. As of today, machinery will be sold as scrap. S....
X X X X Extracts X X X X
X X X X Extracts X X X X
....o after discharging liability as per section 29(5) of CGST Act,2017, ITC balance will appear in ECL.<br> Discussion Forum - Knowledge Sharing ....