Central Board of Indirect Taxes and Customs (CBIC) has issued Circular No.192/04/2023 to provide clarification regarding charging of interest in cases of wrong availment of Integrated Goods and Services Tax (IGST) credit and reversal thereof.
Key points of the Circular are as below:
- There will be no interest liability, if IGST credit has been wrongly availed and reversed thereof and the balance of input tax credit (ITC) in the electronic credit ledger, under the heads of IGST, CGST and SGST taken together, has never fallen below the amount of such wrongly availed ITC, even if available balance of IGST credit in electronic credit ledger individually falls below the amount of such wrongly availed IGST credit. However, interest will get attracted if balance of electronic credit ledger under the heads of IGST, CGST and SGST taken together falls below such wrongly availed amount of IGST credit as it will amount to to the utilization of such wrongly availed IGST credit.
- Credit of compensation cess available in electronic credit ledger cannot be taken into account while considering the balance of electronic credit ledger for the purpose of calculation of interest as ITC in respect of compensation cess on supply of goods and services can be utilised only towards payment of compensation cess leviable on supply of goods and services.
Source: Central Board of Indirect Taxes and Customs (CBIC)
