GST interest is not chargeable where tax stood credited in the electronic cash ledger before the return due date.

Interest under GST is not leviable on tax that was already credited to the taxpayer's electronic cash ledger before the return due date and remained there until later debit on filing. Rule 88B(1) of the CGST Rules, 2017 was applied to treat such credited amounts as excluded from interest computation, because the tax had effectively been deposited in the ledger within time. The rule was regarded as clarificatory, so no separate issue of retrospective or prospective operation arose.

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Issues: Whether interest could be levied for delayed filing of returns when the tax amount had already been credited in the assessee's electronic cash ledger before the due date.

Analysis: The Court followed the principle that interest liability on GST does not continue to accrue once the amount due stands deposited in the taxpayer's electronic cash ledger. It also relied on Rule 88B(1) of the Central Goods and Services Tax Rules, 2017, which provides that where tax is credited in the electronic cash ledger on or before the due date but debited later while filing the return, such amount is not to be considered for interest calculation if it remained in the ledger from the due date until debit. The rule was treated as clarificatory, so the question of retrospective or prospective operation did not arise.

Conclusion: Interest was not leviable on the amount already available in the electronic cash ledger before the due date.

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