Interest liability

This query is : Resolved

charan (Querist)
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19 February 2019 Dear Experts,

Can any one please guide me about when the interest liability arises for late fling of GSTR3B return after due date.

Example: I have 100000 in ITC and 60000 outward Tax. I am filing the return 10 days after the due date. Now do i need to pay interest @18% on 60000 in this case. Please guide me as it is very urgent for me and If possible provide me any notification or other supporting document as i need to submit the same in the GST department.

Thanks everyone.

CA ANUBHAV

CA ANUBHAV (Expert)
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25 February 2019 After reading the provisions of law i have framed my opinion that interest should be charged on net tax liability and not gross liability.. provisions of law reads as under:

Every person who is liable to pay tax in accordance with the provisions of this Act or the rules made thereunder, but fails to pay the tax or any part thereof to the Government within the period prescribed, shall for the period for which the tax or any part thereof remains unpaid, pay, on his own, interest at such rate, not exceeding eighteen per cent., as may be notified by the Government on the recommendations of the Council.

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., as may be notified by the Government on the recommendations of the Council.

further want to tell you that Interest to be paid on gross liability is only on the basis of Standing order No: 01/2019 dated 04.02.2019 passed by Hyderabad GST Commissionerate. In my opinion it should be charged on net liability or should be charged on the amount which has been paid late to revenue.