The Government of West Bengal on October 10, 2023, issued the clarification on charging of interest under section 50(3) of the WBGST Act, 2017, in cases of wrong availment of IGST credit and reversal thereof.
The following clarification has been provided namely: -
• Clarifying in respect of wrong availment of IGST credit by a registered person and reversal thereof
1. 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 WBGST 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 the available balance of IGST credit in electronic credit ledger individually falls below the amount of such wrongly availed IGST credit.
2. 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 the 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 WBGST Act, read with section 20 of Integrated Goods and Services Tax Act, 2017 and sub-rule (3) of rule 88B of WBGST.
• Clarification is provided with respect to whether the credit of compensation cess available in the electronic credit ledger shall be taken into account while considering the balance of the electronic credit ledger.
1. The credit of compensation cess available in the electronic credit ledger cannot be taken into account while considering the balance of the electronic credit ledger for the purpose of calculation of interest under sub-rule (3) of rule 88B of WBGST Rules in respect of wrongly availed and utilized IGST, CGST or SGST credit.
[Trade Circular No. 16/2023]
