Question

At the time of implementation of GST, initially Trans-1 was not available in GSTN portal for availing transitional credit and date for filling GSTR3B was due hence we had taken credit through GSTR3B and filled return. Later on we have also filled Trans-1 and hence both credit got reflected in credit ledger in GSTN portal, we had informed this matter to GST department and also raised query for resolving the same. Later on we had reversed credit through GSTR3B and informed to GST department also. But now GST department is asking for interest @ 24% for wrong availment credit, wherein it is purely because of new system implementaion/trans-1 not available on GSTN portal, Requested to please advise in the matter.

Answer

If credit is claimed wrongly or in excess then Interest is required to be paid on credit excess claimed even if it is not utilized as per section 50(3) of CGST Act reproduced below:

A taxable person who makes an undue or excess claim of input tax credit under subsection (10) of section 42 or undue or excess reduction in output tax liability under subsection (10) of section 43, shall pay interest on such undue or excess claim or on such undue or excess reduction, as the case may be, at such rate not exceeding twenty-four per cent., as may be notified by the Government on the recommendations of the Council.

As in your case credit is wrongly claimed in GSTR-3B
, therefore you are required for interest liability even if you have not utilised the same. (Reply dt.11/10/2018)