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No interest for availed ITC: Patna HC

No interest for availed ITC: A huge relief for taxpayers in GST:

The litigation in GST is getting heat. every day a new decision is making history. HC are bringing huge relief to the taxpayers. This one is about interest levy on availed ITC in GST. You may also face this scenario. ITC is availed in the ledger. Then we realized that it was wrong ITC. Now the question is whether it is liable for any interest? It is held by Patna high court that no interest for availed ITC is leviable unless it is utilized. Section 73 of CGST Act covers the demand. In this case also a notice u/s 73 was issued with penalty and interest.

No interest for availed ITC: Patna HC

M/s Commercial Steel Engineering Corporation, Patna high court

The case was represented by Mr. Gautam kumar Kejriwal.  The applicant had a disputed ITC from the old regime. He availed it as a transitional ITC. He entered it in Tran 1 and it gets reflected in ITC ledger. It was never utilised by the tax payer. Later on, the relevant authority rejected this ITC. Proceedings u/s 73 of BGST Act were initiated and the taxpayer was served a demand for Interest and penalty also. The taxpayer pleaded that interest is leviable only when ITC is utilized. The honorable HC held that:

No interest for availed ITC

No interest for availed ITC

An important part of the decision is reproduced above. You can download the full decision below. Thus it is relevant and linked to all GST taxpayers. Now you can reverse your ITC without liability of interest. Many notices will drop for this decision. In case of availed ITC interest levy is not tenable.


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Profile photo of CA Shafaly Girdharwal CA Shafaly Girdharwal


New Delhi, India

CA Shaifaly Girdharwal is a GST consultant, Author, Trainer and a famous You tuber. She has taken many seminars on various topics of GST. She is Partner at Ashu Dalmia & Associates and heading the Indirect Tax department. She has authored a book on GST published by Taxmann.

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