CBIC notified Proviso to Section 50(1) of CGST Act, 2017 – Interest in GST to be levied on Net Tax liability w.e.f September 1, 2020 and on Gross Liability till 31st August 2020.

Section 50 of CGST Act 2017 was amended by Finance (No. 2) Act, 2019 (23 of 2019) by inserting a proviso to section 50(1) from a date which government notify in this regard. Section 50 related to Interest on GST and says charging of interest on Gross amount instead of net amount. Now Government has notified that interest will be applicable on net amount with effect from 1st day of September, 2020 vide Notification No. 63/2020-Central Tax, dated. 25th August, 2020.

Extract of Provision to Section 50(1) as inserted vide section 100 of  Finance (No. 2) Act, 2019 (23 of 2019) and as notified by CBIC with effect from 1st day of September, 2020 vide Notification No. 63/2020-Central Tax, dated. 25th August, 2020

Amendment of section 50

100. In section 50 of the Central Goods and Services Tax Act, in sub-section (1), thefollowing proviso shall be inserted, namely:––

“Provided that the interest on tax payable in respect of supplies made during atax period and declared in the return for the said period furnished after the due date in accordance with the provisions of section 39, except where such return is furnished after commencement of any proceedings under section 73 or section 74 in respect ofthe said period, shall be levied on that portion of the tax that is paid by debiting the electronic cash ledger.”

Here it will be interesting to know that 39th GST Council recommendations on Law & Procedures has provided that Interest for delay in payment of GST to be charged on the net cash tax liability w.e.f. 01.07.2017 (Law to be amended retrospectively) but still government notified the provisions prospectively wef 01.09.2020 instead of notifying the same wef 01.07.2017.

on 21st August 2020 Hon’ble Orissa High Court in the case of Prasanna Kumar Bisoi Vs Union of India directed GST department to dispose of the representation filed by the petitioner keeping in view the decision taken in the 39th meeting of GST Council, as expeditiously as possible.

It seems a battle is on between Taxpayer and Department with respect to date of Applicability of provisions of Proviso to Section 50(1) of GST Act, 2017.

Text of the Notification No. 63/2020-Central Tax, dated. 25th August, 2020 is as follows:-

of Revenue)
(Central Board
of Indirect Taxes and Customs)
New Delhi

Notification No. 63/2020–Central Tax

Dated: 25th August, 2020

G.S.R. 527(E).—In exercise of the powers conferred by sub-section (2) of section 1 of the Finance (No. 2) Act, 2019 (23 of 2019), the Central Government hereby appoints the 1st day of September, 2020, as the date on which the provisions of section 100 of the Finance (No. 2) Act, 2019 (23 of 2019), shall come into force.

[F. No. 20/06/09/2019-GST]


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  1. Krp Rao says:

    I HV one query. What if the total liability was discharged by itc after the due date where itc.itself was credited in 2a after due date.

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