CBIC has issued a press release stating that  amendment in Section 50 is prospective & assured that no recovery no recoveries shall be made for the past period as well by the Central and State tax administration in accordance with the decision taken in the 39th Meeting of GST Council. Here a thing to ponder is why CBIC issues Press Release instead of issuing Circular when Even courts normally do not take cognizance of press release when it comes to legal interpretation.

CBIC has not clarified the technical limitation which stopped them  from issuing notification from Retrospective effect. Don’t know when the Government imposes Taxes and Penalties from Retrospective effects where these technical limitations disappear.

Text of the CBIC Press Release is as follows-

Ministry of Finance

Interest on delayed payment of GST: CBIC

Posted On: 26 AUG 2020 5:34PM by PIB Delhi

The Central Board of Indirect Taxes & Customs (CBIC) today clarified that the Notification No. 63/2020-Central Tax dated 25th August 2020 relating to interest on delayed payment of GST has been issued prospectively due to certain technical limitations. However, it has assured that no recoveries shall be made for the past period as well by the Central and State tax administration in accordance with the decision taken in the 39th Meeting of GST Council. This will ensure full relief to the taxpayers as decided by the GST Council.

CBIC explanation came in response to an assortment of comments in the social media with respect to Notification dated 25th August 2020 regarding charging of interest on delayed payment of GST on net liability (the tax liability discharged in cash) w.e.f. 1st September 2020.

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  1. P.R.Rajendran says:

    This is the very defect of Union Govt denying resrospective effect.But,While the issue was in pending The Officers used to issue notices on Gross liability on the basis of Telengana HC’s Verdict.
    Very very Simple issue which was dealt with carelessness.

  2. Dhiren Gandhi says:

    I fully agree with the remarks made by Neelam Bhandari. The Council must circulate to this effect to all States Chief Commissioners.

  3. Suresh Narla says:

    Yet the interest rates are very much high in GST, probably the highest on the earth. The trade circles and agencies for tax reforms shall look into the matter.

  4. B.Chandra Sekhar says:

    In the guise of Revenue, the officials do a lot of sins. The Governments have to careful. The Governments shall have politicians who will have better understanding of such things i.e not just levying additional things but practicality. Even I feel the interest rates @ 18% & 24% in GST are the highest in the world.

  5. Wilson Gilbert says:

    What about those taxpayers who have paid heavy interest penalty for this period?
    Many like me are badly affected.
    Atleast refund or adjust in present gst payments. Hoping for a positive reply.

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October 2021