73(5) Voluntary GST Payment

[Bayyareddy DK]

Dear Sir/Madam,,

I have utilised input tax for the fy 19-20 and filed monthly and annual returns in time. I came to know now that input should have not been utilised. Voluntarily on 5/7/21, i paid tax along with interest U/s. 73(5) at 24%. The office incharge called me today and asking penalty amount as it is paid after filing of annual returns. Is this penalty has to be paid even if taxes paid voluntarily before issue any notice.? Please advice

AI Summary

Taxpayer Avoids Penalty for Voluntary GST Payment Under Section 73 of CGST Act; Correct Interest Rate is 18% A taxpayer voluntarily paid GST along with interest after realizing they incorrectly utilized input tax for the fiscal year 2019-2020. The taxpayer was later asked by an officer to pay a penalty since the payment was made after filing annual returns. Experts on the forum clarified that under Section 73(5) and (6) of the CGST Act, no penalty should be imposed if the tax is paid voluntarily before any notice is issued. They also noted that the interest rate should be 18%, not 24%. The discussion further explored the applicability of penalties under different sections, concluding that a general penalty under Section 125 is not applicable in this case.