No interest on reversal of wrongful availment of credit

Last updated: 06 August 2021

Court :
Madras High Court

Brief :
The Hon'ble Madras High Court in the case of M/s F1 Components Pvt. Ltd. v. The State Tax Officer, Chennai [W.P. No.6631 of 2021 And WMP No.7188 of 2021, dated July 09, 2021] partly set aside the order passed by the Revenue Department to the extent that interest on remittances by way of adjustment of electronic credit register is not leviable, in a matter challenging levy of interest under Section 50 of the Central Goods and Services Tax Act, 2017 ('the CGST Act') on reversal of wrongly availed Input Tax Credit ('ITC') and upheld the levy of interest on the belated cash remittance. Held that, the interest on cash remittances is compulsory and mandatory. Further held that, in a case where the claim of ITC by an assessee is erroneous, then the question of Section 42 of the CGST Act does not arise at all, since it is not the case of mismatch, one of wrongful claim of ITC.

Citation :
W.P. No.6631 of 2021 And WMP No.7188 of 2021, dated July 09, 2021