Section 21 of CGST Act 2017: Manner of Recovery of Credit (ITC) Distributed in Excess

Provisions under Section 21 of the Central Goods and Services Tax (CGST) Act, 2017 relating to “Manner of Recovery of Credit (ITC) Distributed in Excess”, are as under:

Section 21 of CGST Act 2017: Manner of Recovery of Credit Distributed in Excess (CHAPTER V – INPUT TAX CREDIT)

Where the Input Service Distributor distributes the credit in contravention of the provisions contained in section 20 resulting in excess distribution of credit to one or more recipients of credit, the excess credit so distributed shall be recovered from such recipients along with interest, and the provisions of section 73 or section 74, as the case may be, shall, mutatis mutandis, apply for determination of amount to be recovered.

Amendments History:

1. CBEC notifies 1st July 2017 as the Commencement date for Section 21 of the CGST Act 2017, vide Notification 9/2017 Central Tax.

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Govt. has notified the CGST Act, 2017 on 12th April, 2017, which has subsequently been amended through the CGST (Extension to J&K) Act 2017, Finance Act 2018, CGST Amendment Act 2018, Finance (No. 2) Act 2019, Finance Act 2020, Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance 2020. Further, CBEC/ CBIC has also issued various Notifications from time to time, relating to the commencement date of various Sections/ Provisions in the respective CGST/ Amendment Acts, wherever required.

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