Court sets aside interest demand on delayed tax remittance under CGST Act, 2017

The court partially set aside the communication demanding interest on delayed tax remittance under the CGST Act, 2017. The petitioner's liability for delayed tax payment in cash was acknowledged, but it was held that no interest was due if the tax was remitted by adjusting available credit. The petitioner had already paid an amount exceeding the interest payable, resulting in the remaining interest related to tax liability through credit adjustment being set aside. The court referred to a previous decision and disposed of the writ petition without imposing costs.

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Issues: Challenge to communication for interest on delayed tax remittance under CGST Act, 2017.

Analysis:
1. The petitioner challenged a communication from the Superintendent of GST and Central Excise, demanding payment of approximately Rs. 7,81,187 as interest for delayed tax remittance for financial periods 2017-18, 2018-19, and 2019-20. The interest was imposed under Section 50 of the CGST Act at 18%.

2. The petitioner admitted liability for the delayed tax component to be paid in cash but argued that no interest was due if the tax was remitted by adjusting the available credit in the electronic register. The revenue accepted this position, and the standing counsel calculated that Rs. 1,98,416 was payable as interest on cash payment. The petitioner informed the court that they had already paid Rs. 2,01,330 to date. Consequently, the remaining interest related to tax liability through credit adjustment was deemed to be set aside.

3. Referring to a previous decision in the case of M/s. Maansarovar Motors Private Limited, the court partially set aside the impugned order. The judgment concluded by disposing of the writ petition in the aforementioned terms and closing the connected miscellaneous petitions without imposing any costs.

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