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Interest on GST

Murali Mohan Naidu (Articleship) (29 Points)

22 February 2020

Please clarify that the under GST interest on delay payment of Tax will be calculated on gross liability or net liability i.e. after claiming input tax credit

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4 Replies

RAJA P M ("Do the Right Thing...!!!") (128085 Points)
Replied 22 February 2020

Net liability

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PC Sharma (66 Points)
Replied 23 February 2020

Raja P M , please clarify with proper provision,rule,section.

ARS BHARATHI (Executive in gst department) (274 Points)
Replied 23 February 2020

As per section 50(1) of cgst rules, 2017, before the amendment, interest has to be paid on the gross liability, i.e., on both ITC component and cash component. In terms of the public demand, the gst council in its meeting has decided to accept the request for payment of interest on cash component only. Accordingly, the amendment was included in finance bill 2019, under section 100 and has become act in august 2019. As central gst act. is having equal state gst act in every act, it is important that every state has to pass the amendment before it is implemented in both state and center level. As on date, telungana and west bengal has to be pass the same. Hence, it will be notified sooner or later. In the meantime various high court judgements both in favour and against have come, leaving room for clarity. Hope, this will be sorted out soon.

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