Penal provisions:

Section 16 (16) of the MGL gives power to prescribe manner for recovery of ITC, taken wrongly, from the registered taxable person. Such recovery would have to be made by invoking the provisions contained in section 51 of the MGL.

Section 66 (1) (vi) provides that where a taxable person takes and/or utilizes input tax credit without actual receipt of goods and/or services either fully or partially, he shall be liable to a penalty of rupees ten thousand or an amount equivalent to input tax credit availed of, whichever is higher.