2026 (6) TMI 1208

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....on to the GSTR - 2A auto-populated return. According to learned counsel, any liability imposed on account of such discrepancy cannot be characterised as wrongful availment and utilisation of ITC. Consequently, he contends that the petitioner is entitled to the benefit of circular bearing F.No.CBEC-20/01/08/2019-GST, dated 18.09.2020. Relying on the proviso to sub-section (1) of Section 50 of applicable GST enactments, learned counsel submits that interest is payable only on the portion of the tax paid by debiting the electronic cash ledger and not by debiting the electronic credit ledger. In the case at hand, he contends that the tax liability was discharged by debiting the electronic credit ledger of the petitioner. He also relies on the j....

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....return is furnished after commencement of any proceedings under section 73 or section 74 [or section 74A] in respect of the said period, shall be payable on that portion of the tax that is paid by debiting the electronic cash ledger.] (2) The interest under sub-section (1) shall be calculated, in such manner as may be prescribed, from the day succeeding the day on which such tax was due to be paid. [(3) Where the input tax credit has been wrongly availed and utilised, the registered person shall pay interest on such input tax credit wrongly availed and utilised, at such rate not exceeding twenty-four per cent, as may be notified by the Government, on the recommendations of the Council, and the interest shall be calculated,....

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....titled thereto would qualify as wrongful availment and utilisation. This conclusion is fortified by the fact that bad faith availment and utilisation is dealt with separately under Section 74 inter alia by prescribing a higher penalty. As a corollary, the specific provision in sub-section (3) of Section 50 is attracted. 7. This provision is required to be read with Rule 88B(3). Said sub-rule reads as under: "(3) In case, where interest is payable on the amount of input tax credit wrongly availed and utilised in accordance with sub-section (3) of section 50, the interest shall be calculated on the amount of input tax credit wrongly availed and utilised, for the period starting from the date of utilisation of such wrongly availed ....