Hello everyone,
Can Interest on tax liability not be computed to the extent input credit is available in electronic credit ledger at the time such tax became payable ? In simple words , if tax demand is Rs. 100 and electronic credit ledger has Rs. 80 , whether interest is to be computed on Rs. 100 or Rs. 20 (Rs. 100- Rs. 80) ?
Interest on GST Liability: Full Tax Amount or Only Unutilized Credit? Section 50 and Rule 88B Explained. A discussion forum addresses whether interest on GST liability should be calculated on the full tax amount or only on the portion not covered by available input credit in the electronic credit ledger. The initial query suggests that if a tax demand is Rs. 100 and Rs. 80 is available in the credit ledger, interest should only be on Rs. 20. Responses highlight that under Section 50 of the CGST Act and Rule 88B, interest may not apply if the input credit is not utilized. However, specific conditions must be met, and the department may demand interest on late reversals. The discussion emphasizes the complexity of the issue and the potential for litigation. (AI Summary)
TaxTMI 
TaxTMI 
TaxTMI 
