Outward liability shown in GSTR9 and settlement of tax

[Sudhir Kumar]

One of my client has inadvertently missed to show complete sell /outward tax liability in GSTR-1. Hence no question of short payment arises. But later on he has shown excess outward supply in the GSTR-9 for the same period and paid applicable tax through DRC-03 but not paid the interest as he argued that he filed annual return and excess liability has been shown in annual return and tax paid accordingly. The matter pertains to 2017 18 and he filed annual return on 5.12.2020 while made payment on 20.12.2020. Whether liability shown in annual return instead of GSTR-1 is currect and whether he is liable to pay interest,as department sought. Please guide.

AI Summary

Interest on Tax Delayed Despite GSTR-9 Correction: Section 50(1) CGST Act Requires 18% Interest for Late Payment A client failed to report complete outward tax liability in GSTR-1 but corrected it in GSTR-9 and paid the tax via DRC-03 without interest, arguing that the annual return covered the liability. The issue concerns whether interest is due for the period from the original due date to the date of payment. Respondents argue that interest at 18% is applicable due to the delay, regardless of payment via ITC, as the provisions under Section 50(1) of the CGST Act and related rules necessitate interest for delays, especially when proceedings under Sections 73 or 74 are involved.