Authors : Dr V Thangavel
DOI : 10.5281/ZENODO.20068532
Volume : 1
Issue : 1
Year : 2024
Page No : 1-5
The GST Department has received complaints nationwide about incorrectly claimed but unutilized ITC. Such objections and the relevant legal laws will be covered in this article. First, interest payments are only made in cases when the output tax burden is reduced, as stated in the CGST Act Section 50(3) read with Section 42(10). Therefore, interest liability is not triggered in situations where the assessed has not used the unnecessary excess input credit, and there is no decrease in output tax due. Second, the company does not lose money because the assessed does not profit financially from using the surplus ITC. It is therefore against the rule of law. Government by laws and the administration of justice by the individuals who are currently in charge of government are both considered aspects of the rule of law. Under the rule of law, judgments must be rendered using established norms and principles, and they must generally be fair and alleviate the suffering of the populace. Thirdly, the GST Council agreed to amend Section 50(3) of the CGST Act to provide that interest would only be charged "on the amount payable through the electronic cash ledger" of the taxpayer after considering this scenario at its 31st meeting on December 22, 2018. The press release read as follows: Section 50 of the CGST Act should be amended to stipulate that interest should only be assessed on the taxpayer's net tax due after accounting for the allowable input tax credit; in other words, interest would only be assessed on the amount owed via the electronic cash ledger. In our opinion, then, there was no amount payable through the electronic cash ledger in circumstances where the excess input credit was mistakenly obtained but not used, and it was reversed through the unutilized credit balance available in the electronic credit ledger in the GST Portal.