Almost every taxpayer at some point has taken excess input tax credit in GST filling and as it was disputable topic till now there was no interest liability as per experts but now CBIC has clarified all the issues related to this which we are going to refer in this blog
What is inadmissible ITC?
The Input tax credit can be inadmissible due to many reason such as:
- • ITC Not reflecting in 2A/2B due to non-filling of GSTR-1/IFF by supplier as per sec 36(4) but ITC has taken by taxpayer
- • Taxpayer don’t have invoice and also haven’t received the goods or services or any of those not properly fulfilled but ITC has taken
- • Any input taken by taxpayer (but later proved as ineligible)
- • Any input taken from negative list as per sec 17(5)
HOW / WHEN INTEREST WILL BE LEVEIABLE?On the availment or on the utilization??
CBIC has clarified that if the taxpayer has only availed the inadmissible ITC then no interest liability is to be paid by the taxpayer but if the taxpayer has availed and also utilized the inadmissible ITC then the interest liability is to be paid by the taxpayer.
It was also very confusing topic for taxpayer to pay the interest liability on which percentage so CBIC has clarified that the percentage of interest on inadmissible ITC shall be 18% p.a and will be applicable respectively from the 1stjuly 2017.