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

Interest on GST: charging on gross versus net liability remains unsettled amid conflicting guidance and pending notification.
Whether interest on delayed GST payment is computed on gross tax liability or on net liability after input tax credit is contested; a statutory proviso stating interest be levied on the portion paid from the electronic cash ledger remains unnotified. Administrative instructions have at times required recovery of interest on gross tax amounts, while conflicting judicial decisions hold both for limiting interest to net cash-paid tax and for departmental positions. Recovery actions are underway, and certain courts have held that additional interest not self-assessed requires show-cause and adherence to natural justice before recovery.