Interest on partial delayed payment of GST through Cash

[Sudhir Kumar]

Sir, I have made delayed payment of GST through some ITC and rest through Cash. Whether I have to pay interest on ITC as well as cash amount delayed paid or only to the part of such payment of GST which has been made through cash only.

[Shilpi Jain]

Going strictly by proviso to sec 50 which reads as under, the relief of paying interest only on net liability will be available if the liability is declared in the return in which the liability has to be paid. i.e. if its a liability of Nov '21, then if Nov 21 3B is filed late then interest on net liability only. If that liability is declared in the return of Jan '22 and paid then this benefit will not be available.

This is also in the backdrop that the future credit used for paying past liability, interest waiver will not be eligible.

Provided that the interest on tax payable in respect of supplies made during a tax period and declared in the return for the said period furnished after the due date in accordance with the provisions of section 39, except where such return is furnished after commencement of any proceedings under section 73 or section 74 in respect of the said period, shall be payable on that portion of the tax which is paid by debiting the electronic cash ledger

[KASTURI SETHI]

No need to explain further. Perfect reply by Madam Shilpi Jain.

AI Summary

Interest on late GST payment applies only to the cash-ledger portion when declared in the same period's return. The proviso to section 50 confines interest to the tax portion paid by debiting the electronic cash ledger only when the liability is declared in the return for that same tax period filed after the due date; if the liability is instead declared in a later period's return, or where future credits are used to meet past liabilities, the relief is not available, and the cash-ledger limitation does not apply.