Case Law Analysis
|Andhra Pradesh High Court
Section 50(3) & 74 CGST Act | No Interest or Penalty Due if Ineligible ITC Was Not Utilized: Andhra Pradesh HC
The Andhra Pradesh High Court has ruled that where ineligible Input Tax Credit was availed but not utilized, the tax authorities cannot impose interest under Section 50(3) or penalty under Section 74 of the CGST Act. This clarifies that mere availing of ineligible ITC, without actual benefit or misuse, does not trigger punitive liability - a critical safeguard for businesses facing retrospective tax demands.