Circular No. 192/04/2023-GST

File No. CBIC-20001/5/2023-GST
Government of India
Ministry of Finance
Department of Revenue
Central Board of Indirect Taxes & Customs
GST Policy Wing

New Delhi, Dated the 17th July, 2023

To,

The Principal Chief Commissioners/ Chief Commissioners/ Principal Commissioners/
Commissioners of Central Tax (All)
The Principal Directors General/ Directors General (All)

Madam/Sir

Subject: Clarification on charging of interest under section 50(3) of the CGST Act, 2017, in cases of wrong availment of IGST credit and reversal thereof.

References have been received from trade requesting for clarification regarding charging of
interest under sub-section (3) of section 50 of the Central Goods and Services Tax Act, 2017
(hereinafter referred to as the “CGST 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 CGST Act, read with rule 88B of Central Goods and Services Tax Rules, 2017
(hereinafter referred to as the “CGST 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, at all times, till the time of reversal of the said wrongly availed IGST
credit.

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