Sir,
In terms of Section 50 (3) of CGST Act, If ITC is wrongly taken or utilized, on reversal interest @ 24% is to be paid. However, if refund is delayed for more than 60 days, interest rate @6% will be paid in terms of Section 54(12) of CGST Act, 2017.
Moreover, in terms of Section 2(84) of CGST Act, 2017, person includes Central Government or State Government.
The query is :- Section 54(12) of the Act, can be held to be ultra vires to Article 14 of Constitution of India.
Thanks
Debate on GST Act: Are Different Interest Rates for Refunds and ITC Violations Justified Under Article 14? A discussion on the Goods and Services Tax (GST) Act focused on the interest rates applied under Sections 50(3) and 54(12). The issue raised was whether Section 54(12), which mandates a 6% interest on delayed refunds compared to a 24% interest on wrongly utilized Input Tax Credit (ITC), violates Article 14 of the Indian Constitution. Participants argued that the higher interest rate serves as a deterrent for non-compliance. The consensus was that the differential rates do not constitute discrimination, as the government also pays interest on delayed refunds. The discussion highlighted differing views on fairness and policy implications. (AI Summary)
TaxTMI 
TaxTMI 
