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Interest on delayed payment of tax as contemplated under Section 50 of the Central Goods and Services Tax Act, 2017, is automatic or the same is to be determined, after considering the explanation offered by the assessee.

Section 50 of CGST Act, 2017 — Interest — Whether the interest liability under Section 50 of the CGST Act, 2017 is automatic and can be recovered by the department without giving an opportunity to the assessee for quantifying the said interest liability. The assessees delayed in filing of GST returns and as such delayed in payment of GST. The department calculated interest liability under Section 50 the Act, on the gross tax liability including tax payment made through electronic credit ledger i.e ITC and initiated recovery proceedings by way of attachments of bank account, without considering the assessee’s submission regarding the quantification of interest amount.
Held that :- The Hon’ble High Court dismissed the appeals of the department and held that in terms of Section 50 of the Act, though the liability fastened on the assessee to pay interest is an automatic liability, but quantification of such liability certainly needs an arithmetic exercise after considering the objections, if any, raised by the assessee. — The Assistant Commissioner of CGST & Central Excise, The Commissioner of CGST & Central Excise, The Superintendent of Central Taxes Vs. Daejung Moparts Pvt Ltd., Indian Overseas Bank [2019] 19 TAXLOK.COM 118 (Madras)

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