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Sometimes reversing credit on a genuinely doubtful invoice and asking for release of the rest is practical. Reverse only after checking each invoice, because a reversal is treated as accepting the credit was ineligible.
GST
Reversing doubtful ITC to get the block lifted
Updated . Every paid answer is checked by a CA. Free AI answers are labelled until a CA verifies them.
Provisions
Rule 86A(2), CGST Rules 2017; Sec 73, CGST Act 2017; Rule 142(2), CGST Rules 2017
Analysis
Rule 86A(2) lets the officer release credit once the concern is addressed. If one supplier truly cannot be traced and you cannot prove receipt, paying that ITC with interest through DRC-03 can close that part and support release of the rest. But do not reverse invoices you can defend. Example: ₹1.2 lakh from a supplier with no transport proof could be paid; ₹6 lakh from verified suppliers should be defended.
Close
- Sort blocked invoices into defensible and doubtful.
- Take advice on the doubtful ones.
- Pay any accepted amount with interest through DRC-03 and keep the ARN.
- Send the DRC-03 copy with a request to release the rest.
- Defend the remaining invoices with evidence.
A reversal can be used against you later, so do it only after review.
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