Notice u/s 50 of gst act

This query is : Resolved

karuna kara murthy (Querist)
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04 May 2019 Dear sir i am received Notice Form Central Tax for Payment of Interest on Late Payment of GST amount but the superintendent is calculated on whole what we Output GST Collected for the month and charging @ 1.5 % is it correct and they not consider input gst what we have paid through our purchase invoices but obviously all statutory bodies calculated interest on the net tax payable only
kindly suggest what we can do

Raghavendra Nayak

Raghavendra Nayak (Expert)
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04 May 2019 Going by the wordings used in Section 50(1) of the CGST Act,2017, you will have to pay interest on delayed payment of tax on the outward tax liability. This has been also upheld by the Hon'ble Telangana High Court in the case of M/s Megha Engineering & Infrastructures Ltd's writ petition.
You may also consider taking an alternative view based on the Hon'ble SC decision in the case of Eicher in the erstwhile law wherein it was held that "Input tax is nothing but tax already paid" and hence it may not be appropriate levy interest on Input tax.
Alternative view is more logical & practical and hence advisable to take that view. However, Department may not agree to it. If so, please file an appeal in the next stage.
Best Wishes!