gst interest u/S 50 for late payments of gst

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Dear sir/madam,

Whether interest u/S 50 for late payments of gst calculated on output gst or on output gst - input gst.

Thanking you
Replies (7)
There has be judgment passed by Highcourt of Telangana in accordance with which the interest on Late payments U/s 50 has to be calculated on Gross Output liability and not the Net liability.
u/s 50 interest should be calculate gross total liability
Interest should be paid on net tax liabilities only. Telangana high court descision has been challenged in to appealeate authority. In 31st GST Council meeting, it has been recommended that interest has been charged on net tax liabilities only.

Therefore, till further clarification, order or notification by government, interest must be charged on net tax liabilities, only.
But sir in 31st meeting it is said that this is applicable from the date when notification regarding interest has been issued, and in my knowledge there is no notification issued. Is there any notification issued please send the attachment of notification.
Thanking you
No notification issued, yet.

But, interest should not be charged on already paid tax by taxpair making illigible for taking ITC.

In reality, government due already paid can be claimed as ITC, which is nothing but a certificate/document, only for already paid tax to negate cascading effect.
Therefore, a tax pair must not be charged for already paid tax.

In recent judgement, The Delhi High Court in Landmark Lifestyle vs UOI in WP(C) No. 6055/2019 & CM Appl.No. 26114/2019 has granted stay from the recovery of interest demanded in gross liability i.e. interest on the amount constituting the input tax credit which is, in fact, to be adjusted against the tax liability. It was submitted that on the actual tax liability, interest has been paid by the Petitioner. Against the total tax liability of Rs.3.31 crores the interest liability works out to 8.19 crores which makes it unreasonable and erroneous. Held till the next date, no coercive action be taken against the petitioner for non-payment of the interest amount
In a case department issued notice for demanding interest interest is calculated on the portion of gross liability (without deducting ITC), that means as per above high court decision supplier should go for appeal and give a reference of above judgement. What's ur opinion?
Yes, we have to wait till the disposal of appeal filed against Telangana High court descision or notification issued by government.

Till then tax authority must be judgemental about tax already paid (ITC) and to be paid(cash).


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