Find
18 percent. Notification 09/2022-CT reduced the Sec 50(3) rate from 24 percent to 18 percent, with effect from 1 July 2017.
GST
Interest rate on wrongly used ITC
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Provisions
Sec 50(3), CGST Act 2017; Notification 09/2022-CT; Rule 88B, CGST Rules 2017
Analysis
Interest runs from the date the credit was utilised until it is reversed or paid. Rule 88B explains that utilisation date is the earlier of the return due date or filing date when used through a return. For ₹1,00,000 utilised for 200 days, interest is about ₹9,863. Old notices quoting 24 percent can be challenged.
Close
- Find the date of utilisation as per Rule 88B.
- Count days till reversal.
- Apply 18 percent.
- Pay in cash through DRC-03 or GSTR-3B.
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