interest issue

[giri gattupalli]

respected sir,

one of my client under declared out -put-tax amounting to Rs 5,20,000 for FY 2022-23 and we have paid the same amount in sep -23 through filing FORM DRC-03 , by debting electronic credit ledger. during FY 2022-23 and up to now, always we had amount of input tax credit laying in electronic credit ledger. and now notice is by gst authorities, demanding interest amount for the out put tax declared and paid through form DRC-03.

please discuss as per the provisions of gst whether interest payable or not

thanking you

AI Summary

Interest under Section 50(1) applies to short-paid GST even when paid later from the electronic credit ledger.
The core legal point is that an under-declared output tax paid later by filing FORM DRC-03 and debiting the electronic credit ledger is treated as unpaid/short-paid tax for which interest is attracted under Section 50(1); the proviso to that provision is not applicable to negate interest where the return was filed but tax remained short-paid until payment via DRC-03.