Turnover tax on IMFL parcel sales: later notification fixed the rate for COVID-period sales, and timely payment avoided interest.

For parcel sales of IMFL by FL3/FL11 licensees during the COVID-19 period, the later notification was treated as clarifying the applicable turnover tax rate at 5% for the specified periods, and the Cabinet-approved extension of time governed compliance for those affected sales. On that basis, payment of turnover tax on or before 30.04.2022 was treated as timely where the return was filed by 31.03.2022, and no interest was payable in such cases. If the return was not filed by 31.03.2022 or the tax was not paid by 30.04.2022, interest remained payable from 01.05.2022 until payment.

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Issues: Whether interest was leviable on delayed payment of turnover tax on parcel sales of IMFL by FL3/FL11 licensees for the specified COVID-19 periods, and whether the liability depended on the later notification fixing the rate and the extended time for filing returns and payment.

Analysis: The authorised parcel sales were permitted during the COVID-19 period, but the initial government order did not prescribe the rate of turnover tax for such sales. The later notification fixed the rate at 5% for the specified periods and was given effect for those periods by adopting a purposive interpretation. The decision-making process treated the later notification and the Cabinet-approved extension of time as clarifying the tax position for the affected licensees. On that basis, payment of turnover tax at 5% on or before 30.04.2022 was treated as within time, and no interest was exigible for such cases. Where the return was not filed by 31.03.2022 or the tax was not paid by 30.04.2022, interest remained payable from 01.05.2022 till the date of payment.

Conclusion: Interest was not leviable for licensees who filed the return by 31.03.2022 and paid the turnover tax by 30.04.2022, but interest was leviable for delayed filing or delayed payment beyond that date.

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