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CA Final · Indirect Tax Laws · Payment of Tax

Under rule 88B(3), for interest on input tax credit wrongly availed and utilised, when is the utilisation treated as having occurred if the electronic credit ledger balance falls below the wrongly availed amount on account of payment of tax through the return?

The utilisation date is the earlier of the return's due date and its actual filing date. Where the credit ledger balance falls below the wrongly availed credit because tax is paid through the return, the explanation to rule 88B(3) fixes that earlier date.

  1. AThe date of availing the credit
  2. BThe earlier of the return due date and the actual filing dateCorrect
  3. CThe later of the return due date and the actual filing date
  4. DThe last day of the financial year

Explanation

Explanation (2)(a) to rule 88B(3) takes the date as the date on which the return is due or the actual date of filing, whichever is earlier, where the fall occurs through payment of tax in the return. Choosing the later date reverses the rule.

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