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.

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16 Comments

  1. AJAY TIWARI says:

    यह ग्रास टैक्स लायबिलिटीज पर ब्याज वसूली पर नियम देख कर सरकार में बैठे लोगो की अक्ल पर संदेह हो रहा है, जो काम बिक्री कर ,व्यापार कर ,वैट टैक्स ,एक्साइज ,सर्विस टैक्स में नहीं हुआ वो GST कानून में गंदगी फैला रहे है ,देश को विश्वास ये दिलाया गया था ,GST कानून व्यापारी को सरलता के लिए है ,यहाँ सभी को ये ठोंक रहे है । जब सब ITC इनपुट आउटपुट तुम्हारे पास है तो यह सरकार कैसे सिद्ध कर सकती है कि डिपार्टमेंट को टैक्स नहीं मिला वो तो हमेशा से उन्ही के पास है ,हमें तो केवल एडजस्टमेंट करना है, केवल कैश पेमेंट पर ब्याज की ज़िम्मेदारी व्यापारियों कि है उससे हमें इंकार नहीं। इस कानून का पुरज़ोर विरोध होना चाहिए।।

  2. Ravi Kiran says:

    Tomorrow, the Government and Income Tax Dept may also come up with the same demand that interest has to be charged on total tax liability, excl TDS and advance tax paid for delayed returns.

  3. Paras says:

    The Madras High Court while dealing with Writ Petition Nos.23360 and 23361 of 2019
    & WMP Nos.23106 and 23108 of 2019 held that amendment to sec50 of CGST is curative in nature and hence is retroactive in nature. Interest will accordingly be levied on delayed payment of Net Liability only. (Refex Industries Ltd. Vs. Asst Comm of CGST)

  4. CA SURAJMAL PANWAR says:

    YAH HAY INDIA KA SABKA SATH SABKA VIKAS AND SABKA VISHWAS. THE AUTHORITY AT CBIC DO NOT KNOW WHAT TO FOLLOW AND WHAT NOT. INTEREST ON ITC CREDIT AVAILABLE IN THE LEDGER SHOULD NOT BE CHARGED FOR DELAYED PAYMENT OF TAX..

    1. K.S.SHAH says:

      aap ki bat / point is 100 % correct,
      credit ledger ki amt. use ki he to un par interest
      kese lag shakata he?
      ITC TO 2A ME BHI REFLECT HOTI HE.

  5. CA ASHISH KHANDELWAL says:

    बहुत बड़ा अहसान किया है CBIC ने हम पर। हमारे समझ नहीं आ रहा है की इसको कैसे चुकाएँ

  6. Girish says:

    Retrospective amendment is required as the charging of interest on gross tax is against principles of natural justice as input tax credit is deemed as paid to Government, and for such paid tax, interest is applied.

  7. s prakash says:

    sir,
    If the GSTN can not follow the council meeting decisions,then why you give press releases, the litigation’s will also bring revenue to the government……………out of litigation’s the government wants to make money for its functioning, where is the sanctity for the Council meetings

  8. CA RUPESH NAGPAL says:

    CBIC ITSELF IS GIVING RISE TO VIVADs, IF THEY UNDERSTAND THAT LAW HAS BEEN WRITTEN WRONGLY THEN WHY THE LD. AG IS PUTTING ARGUMENTS IN HON.BLE SC THAT THE BETTER COMPLIANCE THE DEAD LINES SHOULD NOT BE EXTENDED. ACTUALLY GST LAW IS WRITTEN HALF HEARTILY.

    1. AJAY TIWARI says:

      यह ग्रास टैक्स लायबिलिटीज पर ब्याज वसूली पर नियम देख कर सरकार में बैठे लोगो की अक्ल पर संदेह हो रहा है, जो काम बिक्री कर ,व्यापार कर ,वैट टैक्स ,एक्साइज ,सर्विस टैक्स में नहीं हुआ वो GST कानून में गंदगी फैला रहे है ,देश को विश्वास ये दिलाया गया था ,GST कानून व्यापारी को सरलता के लिए है ,यहाँ सभी को ये ठोंक रहे है । जब सब ITC इनपुट आउटपुट तुम्हारे पास है तो यह सरकार कैसे सिद्ध कर सकती है कि डिपार्टमेंट को टैक्स नहीं मिला वो तो हमेशा से उन्ही के पास है ,हमें तो केवल एडजस्टमेंट करना है, केवल कैश पेमेंट पर ब्याज की ज़िम्मेदारी व्यापारियों कि है उससे हमें इंकार नहीं। इस कानून का पुरज़ोर विरोध होना चाहिए।।

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