Interest payable on itc reversal on account of credit note.
sreekumar
(Querist) 28 May 2019
This query is : Resolved
Our supplier issued credit note (taxable value 50,00,000 + IGST 9,00,000 total 59,00,000) which was uploaded to GSTR2A and reported in the monthly returns of May 2018 in which he has reduced output tax liability.The credit issued is on account of annual turnover discount we are eligible.
We accounted the same credit note in the month of April 2019 (23-04-2019), and reversed the ITC credit which will reflect the monthly returns for April 2019.
Now the department is asking interest @ 24% for the delayed period, i.e, 20-06-2018 to 23-04-2019, quoting Sec.50(3) and 42(10) of CGST act, 2017.
My question is, is this demand is correct? if yes, can the interest paid is eligible for refund under Sec.42(9) of the same act.
An early opinion will be highly appreciated.
Thanks in advance.
