Balance Lying in Electronic Cash LedgerLevy of Interest Under Section 50(1)CA. Satyadev Purohit

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The Tax Publishers GST--Interest Under Section 50(1) Balance Lying in Electronic Cash Ledger--Levy of Interest Under Section 50(1) CA. Satyadev Purohit The learned author seeks to analyse an issue as to whether interest under section 50(1) of the Central Goods and Services Tax Act, 2017 can be charged for delayed furnishing of GSTR-3B, where there is sufficient balance lying in the Electronic Cash Ledger. The related issue is being discussed in the light of relevant statutory provisions and recently decided judicial pronouncements. 1. Introduction Section 50 of the Central Goods and Services Tax Act, 2017 (in short "the CGST Act") deals with charge of interest for delayed payment of tax. Sub-section (1) of section 50 provides that 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. The notified rate is 18%. Proviso to section 50(1) provides that the interest on tax payable in respect of supplies made during a tax 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 of the said period, shall be payable on that portion of the tax which is paid by debiting the electronic cash ledger. The manner of calculation of interest is prescribed under section 88B of the Central Goods and Services Tax Rules, 2017 (in short "the CGST Rules"). Sub-rule (1) of rule 88B provides that in case, where the supplies made during a tax period are declared by the registered person in the return for the said period and the said return is furnished after the due date in accordance with provisions of section 39, except where such return is furnished after commencement of any proceedings under section 73 or section 74 in respect of the said period, the interest on tax payable in respect of such supplies shall be calculated on the portion of tax which is paid by debiting the electronic cash ledger, for the period of delay in filing the said return beyond the due date, at such rate as may be notified under sub-section (1) of section 50. SUBSCRIBE FOR FULL CONTENT

The Tax Publishers

GST--Interest Under Section 50(1)

Balance Lying in Electronic Cash Ledger--Levy of Interest Under Section 50(1)

CA. Satyadev Purohit

The learned author seeks to analyse an issue as to whether interest under section 50(1) of the Central Goods and Services Tax Act, 2017 can be charged for delayed furnishing of GSTR-3B, where there is sufficient balance lying in the Electronic Cash Ledger. The related issue is being discussed in the light of relevant statutory provisions and recently decided judicial pronouncements.

1. Introduction

Section 50 of the Central Goods and Services Tax Act, 2017 (in short "the CGST Act") deals with charge of interest for delayed payment of tax.

Sub-section (1) of section 50 provides that 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. The notified rate is 18%.

Proviso to section 50(1) provides that the interest on tax payable in respect of supplies made during a tax 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 of the said period, shall be payable on that portion of the tax which is paid by debiting the electronic cash ledger.

The manner of calculation of interest is prescribed under section 88B of the Central Goods and Services Tax Rules, 2017 (in short "the CGST Rules").

Sub-rule (1) of rule 88B provides that in case, where the supplies made during a tax period are declared by the registered person in the return for the said period and the said return is furnished after the due date in accordance with provisions of section 39, except where such return is furnished after commencement of any proceedings under section 73 or section 74 in respect of the said period, the interest on tax payable in respect of such supplies shall be calculated on the portion of tax which is paid by debiting the electronic cash ledger, for the period of delay in filing the said return beyond the due date, at such rate as may be notified under sub-section (1) of section 50.