Interest rate

[Sudhir Kumar]

Sir whether section 50(3) of CGST Act 2017 in which 24 percent of interest has been recommended is applicable now or amended and only 18% of interest is applicable.

[KASTURI SETHI]

Interest rates for delayed payment of tax and delayed refunds

In exercise of the powers conferred by sub-sections (1) and (3) of section 50, sub-section (12) of section 54 and section 56 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on the recommendations of the Council, hereby fixes the rate of interest per annum, for the purposes of the sections as specified in column (2) of the Table below, as mentioned in the corresponding entry in column (3) of the said Table.

TABLE

Serial Number	Section	Rate of interest(in per cent)
(1)	(2)	(3)
1.	Sub-section (1) of section 50	18
2.	sub-section (3) of section 50	24
3.	sub-section (12) of section 54	6
4.	section 56	6
5.	proviso to section 56	9

2. This notification shall come into force from the 1st day of July, 2017.

[Notification No. 13/2017-C.T., dated 28-6-2017]

Also read Notification No.16/2021-CT dated 1.6.2021 and Notification no.9/22-CT dated 5.7.22

[Sudhir Kumar]

Under section 111 of the Finance Act 2022, it has not been cleared that the interest rate has been reduced to 18% from 24% under section 50(3) of the CGST Act 2017. Any notification regarding reducing the rate of interest in the case of wrongly availed and utilized ITC has come into effect.

[KASTURI SETHI]

Notification No. 13/17-CT dated 28.6.17 was amended by 31/2020-C.T. dated 03-04-2020, Amended by 51/2020-C.T. dated 24-06-2020, Amended by 8/2021-C.T. dated 01-05-2021, Amended by 18/2021-C.T. dated 01-06-2021. Rate of reduction of interest was for specified period only. The period has been mentioned in the above notifications.

Under Section 50(3) of CGST Act, interest rate is 24%.

[KASTURI SETHI]

W.r.f. to my reply above, this is the latest position.

[Amit Agrawal]

Rate of interest u/s 50(3) is 18% p.a. constantly since 01.07.2017 onwards, as per latest position.

These are ex facie views of mine and the same should not be construed as professional advice/suggestion.

[KASTURI SETHI]

Dear querist,

Rate of interest has been reduced to 18% from 24% retrospectively vide Section 116 of Finance Act, 2022 read with (Sixth Schedule) w.e.f. 01-07-2017. ( Before it was read as, "24").

SCH-06 - THE SIXTH SCHEDULE - Finance Act, 2022

Finance Act, 2022

Schedules Sch

SCHEDULES

Contents THE SIXTH SCHEDULE [See section 116(1) ] Notification number and date Amendment Date of effect of amendment (1) (2) (3) G.S.R 661 (E), dated the 28th June, 2017 [No.349/72/2017-GST, dated 28th June, 2017] In the said notification, in the Table, against serial number 2, in column (3), for the figures “24”, the figures “18” shall be substituted. 1st July, 2017.

[Padmanathan KV]

Dear queriest, It is 18% vide FA, 2022 section 116 rw. schedule thereof.

[Shilpi Jain]

Though in many cases in the past the department has been raising demands with 24% interest. Right from the beginning 24% interest is not applicable for wrong utilisation of credit. It is only 18%.

[KALLESHAMURTHY MURTHY K.N.]

Rate of interest has been reduced to 18% from 24% retrospectively vide Section 116 of Finance Act, 2022 read with (Sixth Schedule) w.e.f. 01-07-2017. ( Before it was read as, "24").

SCH-06 - THE SIXTH SCHEDULE - Finance Act, 2022

Finance Act, 2022

Schedules Sch

SCHEDULES

Contents THE SIXTH SCHEDULE [See section 116(1) ] Notification number and date Amendment Date of effect of amendment (1) (2) (3) G.S.R 661 (E), dated the 28th June, 2017 [No.349/72/2017-GST, dated 28th June, 2017] In the said notification, in the Table, against serial number 2, in column (3), for the figures “24”, the figures “18” shall be substituted. 1st July, 2017.

AI Summary

Interest rate under Section 50(3) revised by Finance Act amendment, applying retrospectively to prior GST liabilities.
The statutory amendment effected by the Finance Act substitutes the earlier notified figure for the interest entry corresponding to the provision governing interest on wrongly availed and utilised input tax credit, thereby changing the prescribed rate by altering the notification table and applying that substituted figure for the period specified in the schedule.