Interest under 50(1), Goods and Services Tax - GST

[Vasudev Mehta]

The assesse had output tax through credit ledger in 2017-18 on 03.01.2020 through DRC 03 during audit. The assesse had enough balance in the electronic credit ledger till that time. Whether interest under section 50(1) is applicable on the above transaction where there was enough balance in ecl?

Posts / Replies

[Amit Agrawal]

Where ITC is wrongly availed but not utilized, one can take benefit of Section 50 (3) of the CGST Act, 2017 read with rule 88B (3) of the CGST Act, 2017.

But, this benefit is not available where any output tax liability was not disclosed & paid while filing return for the month when such output liability arises. In other words, subsequent payment of output taxes upon Dept's audit objection, interest is payable u/s 50 (1) of the CGST Act, 2017 read with rule 88B (3) of the CGST Act, 2017 even when tax-payer is having constant ITC balance in his ledger for in-between period.

These are ex facie views of mine and the same should not be construed as professional advice / suggestion.

[KASTURI SETHI]

If the department directs to pay GST under Section 74 of CGST Act, interest will be payable.

[Amit Agrawal]

In my humble view, liability to pay interest u/s 50 (1) will be there even if Dept. issues SCN u/s 73.

These are ex facie views of mine and the same should not be construed as professional advice / suggestion.

[KASTURI SETHI]

Sh.Amit Agrawal Ji,

Sir, I agree with your reply at serial no.3 above and accordingly, I amend my reply at serial no.2.