Can Tax be deemed to have been paid in time once interest is paid for delayed payment

[Somit Goyal]

In one of the case the Department is demanding interest from the recipient for claim of ITC where supplier have delayed in their payment of taxes citing the reason that you have claimed ITC earlier then the same becoming eligible. In such situation, if the Supplier has paid interest then one should be in a position to contest that taxes are deemed to have been paid in time. Can someone throw more light on this theory?

AI Summary

Debate on Whether Interest Payment for Late GST Settlements Equals Timely Tax Payment; Section 16(2) Involved. A forum discussion revolves around whether paying interest on delayed tax payments under GST implies that taxes were paid on time. The initial query suggests that if a supplier pays interest for delayed tax, it should be considered timely payment, allowing the recipient to claim Input Tax Credit (ITC). Replies indicate differing views: one suggests conditions in Section 16(2) of the GST Act should be met post-facto, another asserts that interest payment does not equate to timely tax payment, and a third highlights the disproportionate interest burden. The consensus is that interest payment does not imply timely tax payment, but ITC can be claimed once the supplier settles the tax.