We claimed ITC in 3B for Mar.18 but it was ineligible. Now we are reversing it through DRC-03 while filing GSTR-9 for FY.2017-18 1. Do we need to pay 24% interest on reversal amount? (for 2 years) 2. If not paid now, and government issues notice after 3 years. Do we need to pay interest for 5 years or 2 years?

Reply— 

As per Section 50(3) of CGST Act, a taxable person who makes an undue or excess claim of input tax credit under sub-section (10) of section 42 or undue or excess reduction in output tax liability under sub-section (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.

Thus, taxpayer has to reverse the excess ITC claimed with interest as per above provision. The interest needs to be paid for 5 years.