Answer

1. F

   Facts

   Interest under Sec 50 is payable on the reversed ITC. Under Sec 50(3) and Rule 88B(3), interest on wrongly availed credit arises only if it was utilised, at 18 percent a year from utilisation till reversal.

2. P

   Provisions and law

   • Rule 37, CGST Rules 2017If the supplier is not paid within 180 days of the invoice, the proportionate ITC is shown as reversed in the GSTR-3B for the tax period immediately after the 180 days, with interest under Sec 50; it is re-availed once payment is made. Not applicable to reverse charge supplies, and to deemed supplies without consideration.
   • 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.
3. A

   Analysis

   If your credit ledger balance never fell below the ₹18,000 reversed, there was no utilisation and interest can be nil. If the ledger was used up to pay tax, interest runs from that date until reversal. For ₹18,000 utilised for 150 days, interest at 18 percent is about ₹1,332. Practitioners differ on interest in Rule 37 cases, so keep your working.

4. C

   Conclusion

   1. 1Check the credit ledger balance from claim to reversal.
   2. 2Find if and when the balance fell below the reversed amount.
   3. 3Compute interest at 18 percent for that period.
   4. 4Pay interest in GSTR-3B Table 5.1 or DRC-03.

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