The interest would be on the net cash tax liability for the period prior to the amendment i.e., from 01.07.2017 to 31.08.2020.
Section 50 of the CGST Act — Interest – The petitioner submitted that there was some delay in filing the monthly returns in form GSTR-3B and GSTR-1, as such he was asked for payment of interest on delayed payment of taxes for certain periods on gross net liability by issuing various notices. The petitioner remitted the interest computed on net tax liability. The petitioner mainly prayed for directions that the interest be calculated on net liability basis and not on gross liability basis. The court observed that amendment to section 50 was introduced by Finance (No.2) Act, 2019 for charging interest on the net cash tax liability. The said amendment was made effective prospectively from 01.09.2020 vide notification No. 63/2020-Central Tax dated 25.08.2020. GST Council in its 39th meeting recommended that interest should be charged on the net cash tax liability with effect from 01.07.2017. Further, a press release was issued on 26.08.2020 for clarification on the issue. The court further observed that administrative instructions dated 18.09.2020 clarified that the interest would be on the net cash tax liability for the period prior to the amendment i.e., from 01.07.2017 to 31.08.2020.
Held that:- The Hon’ble High Court allowed the petition by quashing the notice dated 16.07.2020. Further directed the respondent to intimate the petitioner about the quantum of interest payable on account of delayed payment of GST for the period under consideration in terms of the administrative instructions dated 18.09.2020 and the same shall be paid by the petitioner, if not already paid.
The interest would be on the net cash tax liability for the period prior to the amendment i.e., from 01.07.2017 to 31.08.2020.
Section 50 of the CGST Act — Interest – The petitioner submitted that there was some delay in filing the monthly returns in form GSTR-3B and GSTR-1, as such he was asked for payment of interest on delayed payment of taxes for certain periods on gross net liability by issuing various notices. The petitioner remitted the interest computed on net tax liability. The petitioner mainly prayed for directions that the interest be calculated on net liability basis and not on gross liability basis. The court observed that amendment to section 50 was introduced by Finance (No.2) Act, 2019 for charging interest on the net cash tax liability. The said amendment was made effective prospectively from 01.09.2020 vide notification No. 63/2020-Central Tax dated 25.08.2020. GST Council in its 39th meeting recommended that interest should be charged on the net cash tax liability with effect from 01.07.2017. Further, a press release was issued on 26.08.2020 for clarification on the issue. The court further observed that administrative instructions dated 18.09.2020 clarified that the interest would be on the net cash tax liability for the period prior to the amendment i.e., from 01.07.2017 to 31.08.2020.
Held that:- The Hon’ble High Court allowed the petition by quashing the notice dated 16.07.2020. Further directed the respondent to intimate the petitioner about the quantum of interest payable on account of delayed payment of GST for the period under consideration in terms of the administrative instructions dated 18.09.2020 and the same shall be paid by the petitioner, if not already paid.