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TMI BlogINTEREST ON GST- DELAYED TAXX X X X Extracts X X X X X X X X Extracts X X X X ..... ITC Balance - 31.03.2021 - ₹ 5 lakhs ( ALL ITC DUE TO EXCESS INPUT NO TAX PAID IN CASH IN ALL CASES ) ITC Balance - 30.04.2021 - ₹ 3 lakhs ITC Balance - 31.05.2021 - Rs.NIL ITC Balance - 30.06.2021 - ₹ 1 lakh Let's assume there is neither output tax liability nor any ITC for the month of July 2021 and also assume that interest is payable only on Net tax liability. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Now, few missed out B2C invoices of MARCH 2021 having output tax liability of ₹ 3.50 lakhs are considered in GSTR 1 and GSTR 3B pertaining to tax period July 2021 and tax was paid on 20.7.2021. Please confirm that interest shall be chargeable on ₹ 50,000 for the period 1.5.2021 to 31.05.2021 and on ₹ 3.50 lakhs for the period 01.06.2021 to 30.06.2021 and on ₹ 2.50 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lakhs for the period 01.07.2021 to 20.07.2021. ( Assuming interest on Net Itc payment ) OR have to pay interest directly on 3.50 lakh from 22.04.2021 being due date of march return to 20 July 2021. - Reply By Gunjan Shah - The Reply = Department would not like the way you have calculated interest. Section 50(1) proviso states as under: Provided that the interest on tax payable in re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spect of supplies made during a tax period and declared in the return for the said period furnished after the due date in accordance with the provisions of section 39 , except where such return is furnished after commencement of any proceedings under section 73 or section 74 in respect of the said period, shall be payable on that portion of the tax which is paid by debiting the electronic c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ash ledger . Thus, plain reading states that interest shall be payable on the portion of tax which to be paid by debiting the cash ledger. If you pay interest as per your calculation then - 1) Department does not object / verify - issue is settled. 2) There is no interest on interest. - Reply By Shilpi Jain - The Reply = If the liability which is disclosed in the jul return is that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of March period, as per the provision of sec 50 I test will still be liable. However your calculation can be defended considering interest is to compensate any loss caused to department. However this will have to be settled in the Courts only - Reply By ARVIND JAIN - The Reply = NOW : 45th Meeting of the GST Council . In the spirit of earlier Council decision that interest is to be charged on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly in respect of net cash liability, section 50 (3) of the CGST Act to be amended retrospectively, with effect from 1-7-2017, to provide that interest is to be paid by a taxpayer on 'ineligible ITC availed and utilized' and not on 'ineligible ITC availed'. It has also been decided that interest in such cases should be charged on ineligible ITC availed and utilized at 18% with e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ffect from 1-7-2017. Now My View on Int on the net is correct? - Reply By Gunjan Shah - The Reply = You can stand by your, view, you can also take the shelter of intent of the GST Council meeting. However, as shilpi ji already pointed out in earlier reply, if some officer does not agree then you should be ready fight it. I had already advised that there is no interest on interest. - Repl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y By Shilpi Jain - The Reply = What has been mentioned in the Press release is that the Council has decided not to levy interest in case of any ineligible ITC availed but not utilised. So still does not clear the airs... - Reply By Shilpi Jain - The Reply = Also, before relying merely on the press release it is suggested that we wait for the notifications (which have legal force). Some times it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is seen that what comes out in the actual notification has other implications as well. - INTEREST ON GST- DELAYED TAX - Query Started By: - ARVIND JAIN Dated:- 11-9-2021 Goods and Services Tax - GST - Got 6 Replies - GST - Discussion Forum - Knowledge Sharing, reply post by an expert, personal opinion Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... axTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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