Answer

1. F

   Facts

   Excess ITC found at year end is reversed through DRC-03. Interest is due only if the excess was utilised, under Sec 50(3) and Rule 88B(3).

2. P

   Provisions and law

   • Sec 50(3), CGST Act 2017Interest is payable on ITC wrongly availed and utilised, from the date of utilisation till reversal, at the notified rate (18 percent a year).
   • Rule 88B, CGST Rules 2017Interest on a late return is on the cash portion only; amounts already in the cash ledger by the due date are excluded; interest on wrongly availed ITC runs from utilisation till reversal.
   • Rule 142(2), CGST Rules 2017A person paying tax, interest and penalty voluntarily or after an intimation informs the officer in DRC-03, and an acknowledgement issues in DRC-04.
3. A

   Analysis

   Check monthly credit ledger balances to see if they fell below the excess. If yes, interest runs from that date. For example, ₹60,000 excess utilised for 6 months carries about ₹5,400 interest. Pay through DRC-03 in cash and report in GSTR-9.

4. C

   Conclusion

   1. 1Find the excess ITC and when it was claimed.
   2. 2Check utilisation through ledger balances.
   3. 3Compute 18 percent interest for utilised periods.
   4. 4Pay through DRC-03 and report in GSTR-9.

General guidance from TaxSavvy’s library of money processes. Laws change; your Savvy confirms the answer on your exact case before anything is filed.