Taxation - Income TaxQuestion 5584 of 146
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14. In respect of excess claim of ITC under IGST, the firm would be liable to pay interest on the excess availed IGST ITC amount of

Options

A` Nil TAXATION
B` 10,000
C` 80,000
D` 1,00,000
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Correct Answer

Option A` Nil TAXATION

All Options:

  • A` Nil TAXATION
  • B` 10,000
  • C` 80,000
  • D` 1,00,000

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Detailed Solution & Explanation

Under Section 50(3) of the CGST Act, 2017, interest is payable on input tax credit wrongly availed and utilized.
To determine whether wrongly availed ITC has been utilized, we check if the total balance in the electronic credit ledger (across all heads: CGST, SGST, and IGST) falls below the wrongly availed amount.
In the present case:
- Wrongly availed IGST ITC = 1,00,000\displaystyle ₹1,00,000
- Balance in electronic credit ledgers during the period:
- CGST: 70,000\displaystyle ₹70,000
- SGST: 20,000\displaystyle ₹20,000
- IGST: 20,000\displaystyle ₹20,000
- Total Credit Ledger Balance = 70,000+20,000+20,000=1,10,000\displaystyle ₹70,000 + ₹20,000 + ₹20,000 = ₹1,10,000

Since the total credit balance of 1,10,000\displaystyle ₹1,10,000 remained equal to or greater than the wrongly availed IGST ITC of 1,00,000\displaystyle ₹1,00,000, it is deemed that the wrongly availed credit was not utilized.
Consequently, no interest is payable under Section 50(3) of the CGST Act, 2017.

Hence, **Option A** is the correct answer.

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