Reply to notice received

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

31 July 2018 We have received a notice of inquiry from GST dept for utilising more than 95% of input credit for discharging GST liability during FY 2017-18. We have utilised 99% itc & 1% cash for discharging liability. Is there any rules or law that we can not utilise more than 95% of ITC for discharging liability?
How to reply to this Notice?

Natasha jhaver

Natasha jhaver (Expert)
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31 July 2018 There is no rule which says you cannot utilise more than 95% ITC.
Reply them stating the facts that you maintain less stock or what ever is bought you sell or you have eligible credit or your profit margin is low. There has to be a reason for having huge ITC.