Interest on delayed payment of GST

[SARAVANAN PURUSHOTHAMAN]

Sir

Whether interest on late payment of GST to be calculated on Gross tax amount or net tax amount (i.e tax payable after setting of ITC). In Finance Bill no.2 they had amended section 50. But till date CBIC not issued any notification or circular for the same. Kindly advise the whether to charge on Gross amount or Net amount?

Regards

Saravanan

Chartered Accountant.

AI Summary

Debate on GST Interest: Should It Be Calculated on Gross or Net Amount? Confusion Persists Without Notification. A discussion on a forum addressed whether interest on delayed GST payments should be calculated on the gross or net tax amount. The Finance (No. 2) Act 2019 amended Section 50 of the CGST Act, but no notification has been issued, leading to confusion. Some argue interest should be on the gross amount until notified otherwise, while others believe it should be on the net amount. Court rulings and interpretations vary, with some judgments supporting interest on net cash liability. The lack of notification has led to differing practices and ongoing litigation, with taxpayers receiving notices for interest on gross liabilities.