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.