Answer

1. F

   Facts

   If you find that credit was taken on invoices where goods or services were not actually received, the credit is not eligible. Reversing it voluntarily with interest before a notice reduces exposure. Penalty for voluntary payment before a notice is lower than after.

2. P

   Provisions and law

   • Sec 16(2)(b), CGST Act 2017ITC is allowed only if goods or services have actually been received
   • Sec 50(3), CGST Act 2017Interest at 18 percent on ITC wrongly availed and utilised
   • Rule 142(2), CGST Rules 2017Tax and interest can be paid voluntarily in DRC-03 before a show cause notice
3. A

   Analysis

   Example: an internal review finds Rs 2.4 lakh credit on three invoices where stock records show nothing was received. Reverse the Rs 2.4 lakh and pay interest at 18 percent for the period the credit was used, through DRC-03 or GSTR-3B. Record the internal review and fix the purchase process. Take professional advice, since the facts may need careful reporting.

4. C

   Conclusion

   1. 1Identify invoices with no proof of receipt
   2. 2Compute credit and interest from the date of use
   3. 3Reverse or pay through DRC-03 or GSTR-3B
   4. 4Document the review and stop dealings with the supplier
   5. 5Consult a GST professional on further steps

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