TaxTMI 
TaxTMI 
I HAVE RECEIVED SCN U/S 73 FOR FY 2018-19 FOR NON PAYMENT OF INTEREST OF RS 204/- AND IMPOSES PENALTY OF RS 10000/- WHAT TO DO ?
CAN GST DEPARTMENT IMPOSE PENALTY ON INTEREST ON DELAYED PAYMENT OF TAX FOR FY 2018-19
20 Mar 2023 
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Interest on delayed GST payment can be settled to avoid penalty if paid within the notice period.
A show cause notice proposes penalty for non-payment of interest on delayed GST; payment of the outstanding tax together with interest within thirty days of the notice triggers relief under the adjudication provision so that no penalty is payable. Contributors disagree whether interest is independently subject to penalty or forms part of the taxable shortfall, and whether a penalty can be imposed when the principal tax shortfall is not separately quantified. Practical guidance is to pay the interest within the notice period to avoid the proposed penalty while contesting substantive points as needed. (AI Summary)
A show cause notice proposes penalty for non-payment of interest on delayed GST; payment of the outstanding tax together with interest within thirty days of the notice triggers relief under the adjudication provision so that no penalty is payable. Contributors disagree whether interest is independently subject to penalty or forms part of the taxable shortfall, and whether a penalty can be imposed when the principal tax shortfall is not separately quantified. Practical guidance is to pay the interest within the notice period to avoid the proposed penalty while contesting substantive points as needed. (AI Summary)