CBIC has issued a Series of Tweet on 15th February 2020 and justified interest calculation on delayed GST payment on the basis of gross tax liability. Excerpt of Tweets is as follows:-
There are some discussions in social media w.r.t. interest calculation on delayed GST payments post a few media reports regarding Rs. 46000 Cr interest on the delayed GST payments to be collected by tax authorities. On this issue of interest calculation, it is clarified that-
The GST laws, as of now, permit interest calculation on delayed GST payment on the basis of gross tax liability. This position has been upheld in the Telangana High Court’s decision dated 18.04.2019.
In spite of this position of law and Telangana High Court’s order, the Central Government and several State Governments, on the recommendations of GST Council, amended their respective CGST/SGST Acts to charge interest on delayed GST payment on the basis of net tax liability.
Such amendment will be made prospectively. The States of Telangana and West Bengal are in the process of amending their State GST Acts. After the process of amendment is complete, the changed provisions can be put in operation for the entire country.
Reactions of Some of Twitterati
@ca_prajjwal ऐसा लग रहा है हम ब्रिटिश साशन में रह रहे हैं जहां हमसे दोगुना लगान वसूल किया जारहा है बिना किसी गलती कि। If you want to correct the wrong, change it retrospectively madam, prospective amendment is not going to give any relief. Corruption will only increase-
@canitesh_jain Please also respond to the flip side of the coin on following issues
a. U have the right to keep the recommendations of the council in abeyance for more than 15 months
b. The law is not what u say it is even now
c. Telangana high court is reviewing its own order that u r quoting and has said not to take coercive action, why give half truth
d. Many high courts have given unconditional stay from recovery
e. If the law itself is under dispute who gives u power to start recovery proceedings
@ashishrbohra Why prospectively not retrospectively
@Rajesh07121 What about the interest on delayed in refund? Its unidirectional law. No pressure on department for delay. Why every-time tax payers may suffer. No correction in GST also.
@CAAlokKrishan This is a barbaric provision & retrospective amendment is called for in this regard. Please consider retrospective amendment.