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इस पोस्ट को हिंदी में सुने

Balance ITC available under all heads in electronic credit ledger to be considered before calculating interest on wrongly availed IGST.

In recent GST Council Meeting held on 11th July 2023 GST Council recommended to issue clarification regarding the manner of calculation of interest amount liable to be paid under section 50(3) of CGST Act, 2017 in respect of wrongly availed and utilized IGST credit, clarifying inter alia that in cases of wrong availment of IGST credit, the balance of input tax credit (ITC) in electronic credit ledger, under the heads of IGST, CGST and SGST taken together, has to be taken in consideration while calculating such interest liability as per rule 88B of CGST Rules, 2017.

E.g. If a person has wrongly availed & utilized IGST credit, but he still has balance credit in IGST or CGST or SGST, then as per clarification - the taxpayer should get benefit of this balance credit lying in his credit ledger while calculating interest payment on wrongly availed IGST.

This is so because as per GST set-off rules, First IGST input credit is used to set off output liability then only CGST & SGST input credit can be set off. Therefore if a taxpayer still has balance in IGST / CGST / SGST input credit then he would have utilized the same to set off his output liability presuming as if he had not availed the wrong IGST Credit.

So practically Govt is at no revenue loss even if he has availed & utilized wrong IGST credit. In such case only IGST reversal would be required. Interest will not be levied to the extent balance available in credit ledger. 

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GST Council Meeting

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Input Tax Credit

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