Input tax credit reversal applies where payment exceeds the prescribed period, prompting addition to output tax liability and interest.
The article explains that when input tax credit is availed but payment to the supplier is not made within the prescribed period, the recipient must reverse the ITC by adding an equal amount to output tax liability and pay interest from the date of availing the credit until reversal. The rules require disclosure and addition in a specified return and month, but practical compliance is impeded because that return was not implemented on the portal; alternative disclosures may be made but do not strictly follow the prescribed procedure. (AI Summary)