INTEREST ON GST- DELAYED TAX

[ARVIND JAIN]

ITC Balance - 31.03.2021 - ₹ 5 lakhs ( ALL ITC DUE TO EXCESS INPUT NO TAX PAID IN CASH IN ALL CASES )

ITC Balance - 30.04.2021 - ₹ 3 lakhs

ITC Balance - 31.05.2021 - Rs.NIL

ITC Balance - 30.06.2021 - ₹ 1 lakh

Let's assume there is neither output tax liability nor any ITC for the month of July 2021 and also assume that interest is payable only on Net tax liability.

Now, few missed out B2C invoices of MARCH 2021 having output tax liability of ₹ 3.50 lakhs are considered in GSTR 1 and GSTR 3B pertaining to tax period July 2021 and tax was paid on 20.7.2021. Please confirm that interest shall be chargeable on ₹ 50,000 for the period 1.5.2021 to 31.05.2021 and on ₹ 3.50 lakhs for the period 01.06.2021 to 30.06.2021 and
on ₹ 2.50 lakhs for the period 01.07.2021 to 20.07.2021. ( Assuming interest on Net Itc payment )

OR have to pay interest directly on 3.50 lakh from 22.04.2021 being due date of march return to 20 July 2021.

AI Summary

Debate on GST Interest Calculation: Net Tax Liability vs. Full Amount as per Section 50(1) of CGST Act A discussion on a forum addresses the issue of calculating interest on delayed GST payments. A user queries whether interest should be charged on net tax liability or directly on the full amount from the due date. Respondents highlight that, according to Section 50(1) of the CGST Act, interest is payable on the portion of tax paid via the electronic cash ledger. They suggest that while the user's interpretation aligns with the GST Council's intent to charge interest only on net cash liability, disputes may arise requiring court intervention. It is advised to await official notifications for clarity.