Question ID : 44640

082701

For nonfiling of return/nonpayment of tax by supplier of goods If SCN is issued to asessee for excess input claim of input Whether interest and penality be imposed if the Excess claim in GST credit ledger is unutilised

In the instant case it appears the recipient has genuinely paid GST to the Supplier, however, the Supplier did not file his GST returns and did not deposit the GST Collected from the customer with Government. If this is a transaction occuring after , 01 st January 2022, then as per the GST law the Customer fails to satisfy Section 16 (2) of the CGST Act 2017. Thereby the ITC becomes in eligible. In the instant case, as the Itc has been wrongly availed, it shall be reversed. As per Section 50 (3) of the CGST Act interest would apply only when ITC has been wrongly availed and utilized. In this case, the wrongly availed ITC is not utilized. Thereby interest @18% will not apply. Further, penalty may also not apply, as there is no guilty of mind.