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Interest on reversal of ITC,if set off from cash ledger
Eg :if reversal is 1 Lakh , Amount available in cash ledger is 1 lakh ,and it is set off against demand. whether interest is payable ?
Replies (2)
Interest will be payable from the original liability is incurred related to the reversal till the day it is set off from the cash ledger.
Yes, interest will apply on the reversal.
Please check on the date of the utilisation of this reversed ITC and whether the required balance was there in cash or credit ledger to pay off the liability.
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