Whether GST Liability can be paid in Monthly Installments?

In the case of PAZHAYIDOM FOOD VENTURES (P) LTD. v/s SUPERINTENDENT COMMERCIAL TAXES (CGST)

FACTS of the Case:

Petitioner is a private limited company and registered under GST Act, 2017 as a service provider and has admitted Tax arrears for Nov’2018 to March’19 of Rs. 4,00,000/- which it intendeds to pay in monthly installment along with the applicable interest and late fees. As the business of the petitioner has been severely affected by the pandemic, it is not in the financial position to pay the arrears of tax.

Respondents contended that there is no such provision under GST law to allow monthly installment of tax payment along with interest and late fees. This would be against the GST provisions.

Whether GST Liability can be paid in Monthly Installments

KERALA HIGH COURT HELD THAT-

Petitioner has agreed to the arrears of taxes and it is not disputing liability of tax or quantum thereof, for the period in question. It only seeks monthly installment of the payment along with the applicable interest and late fees, Due to pandemic, the business of the petitioner has come to a total standstill and there is no demand pending against the petitioner as on date. Therefore, the High Court has allowed the monthly installment of payment of tax from 25th August’2020 to 25th March’2021 along with the applicable interest and late fees. High Court also held that if petitioner defaults in any installment respondent are allowed to start with the recovery proceedings as mentioned under GST provisions.

My Views: If any one of you is looking for such kind of relief, it would now deem fit to file the writ petition rather than going to Authority of Advance rulings or Appellate Authority of Advance Ruling as chances of getting such kind of reliefs is higher in High Courts as compared to AAR or AAAR. However, one should not blindly follow this decision to seek relief in discharging their tax dues. When considering the implementation of this judgment, there are certain practical difficulties for sure. GST Department allows payment of tax dues arising out of demand raised to be paid in installments. Neither there is any specific provision prescribed in the GST Act for allowing the payment of tax dues in installments nor the GST portal has provided any facility to pay the dues in installments. Though the petition has been disposed of in favour of the taxpayer, it is unclear how the filing of GST returns will be managed without discharging the complete amount of tax arrears.

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