Find
Interest under Sec 50(3) applies only to ITC wrongly availed and utilised. If the credit ledger balance never fell below the wrong amount, it was not utilised and no interest is due, though the credit must still be reversed.
GST
Interest on excess ITC that was not used
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Provisions
Sec 50(3), CGST Act 2017; Rule 88B, CGST Rules 2017
Analysis
If you wrongly claimed ₹80,000 and your credit ledger balance stayed above ₹80,000 every day until reversal, the credit was not used. Rule 88B treats credit as utilised only when the balance falls below the wrong amount. Keep daily ledger extracts to prove this if questioned.
Close
- Download the credit ledger for the period
- Check the lowest balance after the wrong claim
- If it never fell below the wrong amount, reverse without interest
- Note this in Part B with ledger extracts
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