(CBIC Circular No. 192/04/2023-GST, dated 17.07.2023)
Subject: Clarification on charging of interest under section 50(3) of the HGST Act, 2017, in cases of wrong availment of IGST credit and reversal thereof.
The circular seeks to clarify issues regarding charging of interest under sub-section (3) of section 50 of the Haryana Goods and Services Tax Act, 2017 (hereinafter referred to as the "HGST Act") in the cases where IGST credit has been wrongly availed by a registered person. Clarification is being sought as to whether such wrongly availed IGST credit would be considered to have been utilized for the purpose of charging of interest under sub-section (3) of section 50 of HGST Act. read with rule 88B of Haryana Goods and Services Tax Rules, 2017 (hereinafter referred to as the "HGST Rules"), in cases where though the available balance of IGST credit in the electronic credit ledger of the said registered person falls below the amount of such wrongly availed IGST credit, the total balance of input tax credit in the electronic credit ledger of the registered person under the heads of IGST, CGST and SGST taken together remains more than such wrongly availed IGST credit, al all times, till the time of reversal of the said wrongly availed IGST credit.
2. Issue has been examined and to ensure uniformity in the implementation of the provisions of law across the field formations, the Board, in exercise of its powers conferred by section 168 (1) of the HGST Act, hereby clarifies the issues as under:
Thus, in the cases where IGST credit has been wrongly availed and subsequently reversed on a certain date, there will not be any interest liability under sub-section (3) of section 50 of HGST Act if, during the time period starting from such availment and up to such reversal, the balance of input tax credit (ITC) in the electronic credit ledger, under the heads of IGST, CGST and SGST taken together, has never fallen below the amount of such wrongly availed ITC, even if available balance of IGST credit in electronic credit ledger individually falls below the amount of such wrongly availed IGST credit. However, when the balance of ITC, under the heads of IGST, CGST and SGST of electronic credit ledger taken together, falls below such wrongly availed amount of IGST credit, then it will amount to the utilization of such wrongly availed IGST credit and the extent of utilization will be the extent to which the total balance in electronic credit ledger under heads of IGST, CGST and SGST taken together falls below such amount of wrongly availed IGST credit, and will attract interest as per sub-section (3) of section 50 of HGST Act, read with section 20 of Integrated Goods and Services Tax Act, 2017 and sub-rule (3) of rule 88B of HGST Rules.
Accordingly, credit of compensation cess available in electronic credit ledger cannot be taken into account while considering the balance of electronic credit ledger for the purpose of calculation of interest under subrule (3) of rule 88B of HGST Rules in respect of wrongly availed and utilized IGST, CGST or SGST credit.
3. Difficulty, if any, in implementation of this Circular may please be brought to the notice of Department.
ASHOK KUMAR MEENA
Excise and Taxation Commissioner-cum-
Commissioner of State Tax, Haryana