LEVY OF INTEREST ON BELATED PAYMENT OF GST
The Goods and
Services Tax Act, 2017 came into force in India with effect from 1.7.2017.
There are
provisions in GST Act to levy interest on belated payment of GST dues as shown
below:
1. Belated payment of GST and belated submission of GST return will
attract interest at the rate of 18% on gross amount of GST payable. [Section
50(1)]
2. Excess
claim of input tax credit under sub-section (10) of section 42 or undue or
excess reduction in output tax liability under sub-section (10) of section 43,
shall pay interest on such undue or excess claim or on such undue or excess
reduction, as the case may be, at the rate of 24% [Section 50(3)]
50. (1) Every person who is liable to pay tax in
accordance with the provisions of this Act or the rules made thereunder, but
fails to pay the tax or any part thereof to the Government within the period
prescribed, shall for the period for which the tax or any part thereof remains
unpaid, pay, on his own, interest at such rate, not exceeding eighteen per
cent., as may be notified by the Government on the recommendations of the
Council.
(2) The interest under sub-section (1) shall be
calculated, in such manner as may be prescribed, from the day succeeding the
day on which such tax was due to be paid.
(3) A taxable person who makes an undue or excess
claim of input tax credit under sub-section (10) of section 42 or undue or
excess reduction in output tax liability under sub-section (10) of section 43,
shall pay interest on such undue or excess claim or on such undue or excess
reduction, as the case may be, at such rate not exceeding twenty-four per
cent., as may be notified by the Government on the recommendations of the
Council.
The relevant rules were given below:
73. Matching of claim of reduction in the output
tax liability .-The following details relating to the claim of reduction in
output tax liability shall be matched under section 43 after the due date for
furnishing the return in FORM GSTR-3, namely:-
(a)
Goods and
Services Tax Identification Number of the supplier;
(b)
Goods and
Services Tax Identification Number of the recipient;
(c)
credit note
number;
(d)
credit note
date; and
(e)
tax amount:
Provided that where the time limit for furnishing FORM GSTR-1 under section
37and FORM GSTR-2 under section 38 has been extended, the date of matching of
claim of reduction in the output tax liability shall be extended accordingly:
Provided further that the Commissioner may, on the
recommendations of the Council, by order, extend the date of matching relating
to claim of reduction in output tax liability to such date as may be specified
therein.
Explanation.- For the purposes of this rule, it is hereby
declared that – (i) the claim of reduction in output tax liability due to
issuance of credit notes in FORM GSTR-1 that were accepted by the corresponding
recipient in FORM GSTR-2 without amendment shall be treated as matched if the
said recipient has furnished a valid return.
(ii) the claim of reduction in the output tax
liability shall be considered as matched where the amount of output tax
liability after taking into account the reduction claimed is equal to or more
than the claim of input tax credit after taking into account the reduction
admitted and discharged on such credit note by the corresponding recipient in
his valid return. 74.
Final acceptance of reduction in output tax
liability and communication thereof.- (1) The final acceptance of claim of
reduction in output tax liability in respect of any tax period, specified in
sub-section (2) of section 43, shall be made available electronically to the
person making such claim in FORM GST MIS-1 through the common portal.
(2) The claim of reduction in output tax
liability in respect of any tax period which had been communicated as
mis-matched but is found to be matched after rectification by the supplier or
recipient shall be finally accepted and made available electronically to the
person making such claim in FORM GST MIS-1 through the common portal.
75. (1) Where the service of notice or issuance
of order is stayed by an order of a court or Appellate Tribunal, the period of
such stay shall be excluded in computing the period specified in sub-sections
(2) and (10) of section 73 or sub-sections (2) and (10) of section 74, as the
case may be.
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(12) Notwithstanding anything contained in
section 73 or section 74, where any amount of self-assessed tax in accordance
with a return furnished under section 39 remains unpaid, either wholly or
partly, or any amount of interest payable on such tax remains unpaid, the same
shall be recovered under the provisions of section 79
79. Communication and rectification of
discrepancy in details furnished by the ecommerce operator and the
supplier.-(1) Any discrepancy in the details furnished by the operator and
those declared by the supplier shall be made available to the supplier
electronically in FORM GST MIS-3 and to the e-commerce operator electronically
in FORM GST MIS–4 on the common portal on or before the last date of the month
in which the matching has been carried out.
(2) A supplier to whom any discrepancy is made
available under sub-rule (1) may make suitable rectifications in the statement
of outward supplies to be furnished for the month in which the discrepancy is
made available.
(3) An operator to whom any discrepancy is made
available under sub-rule (1) may make suitable rectifications in the statement
to be furnished for the month in which the discrepancy is made available.
(4) Where the discrepancy is not rectified under
sub-rule (2) or sub-rule (3), an amount to the extent of discrepancy shall be
added to the output tax liability of the supplier in his return in FORM GSTR-3
for the month succeeding the month in which the details of discrepancy are made
available and such addition to the output tax liability and interest payable
thereon shall be made available to the supplier electronically on the common
portal in FORM GST MIS–3.
LEVY OF INTEREST INSTRUCTIONS
The
Central Government has issued instructions to the Tax Officials that the law
has cast liability on the taxpayer to assess and pay the interest on delayed
payment of tax. Further, interest payable on such delayed payment of tax can be
recovered under the provisions of section 79 of the CGST Act read with section
75(12), which provides for various methods by which the proper officer shall
proceed to recover any amount which is payable to the Government.
The
Central Government has also clarified that the provisions of section 50 arc
very clear that interest liability is required to be paid on the tax liability
that is paid belatedly, either through cash or through utilization of input tax credit (ITC). In other words, interest is required
to be paid on total amount of tax liability as shown in FORM GSTR-3B.
According
to the above directions, interest on belated payment of IGST, CGST and
SGST/UTGST is payable on the tax due on supply of Goods or Services or both
without deducting the Input Tax Credit adjusted i.e. net claim payable at the
time of filing of FORM GSTR-3B from
the day succeeding the day on which such tax was due to be paid.
EXAMPLES:
INTEREST
PAYABLE BY NORMAL TAX PAYERS
IGST
|
CGST
|
SGST/UTGST
|
TOTAL
|
|
Payable as per FORM GSTR-3B
|
10000.00
|
10000.00
|
10000.00
|
30000.00
|
ITC adjusted
|
5000.00
|
5000.00
|
5000.00
|
15000.00
|
Paid by Cash
|
5000.00
|
5000.00
|
5000.00
|
15000.00
|
Interest to be
levied on IGST Tax of Rs.10000.00 and CGST Tax of Rs.10000.00 and SGST/UTGST
Tax of Rs.10000.00 without deducting Input Tax Credit details
|
||||
Return due date
20.1.2020
Return filed on
20.2.2020
|
Interest
152.88
|
Interest
152.88
|
Interest
152.88
|
Total Interest
458.63
|
