WHETHER INTEREST IS PAYABLE OR NOT???

[BARUN MUKHERJEE]

Respected sir,

One of my client has wrongly incorporated output cess amounting to Rs. 3,76,215.98 instead of Rs. 37,62,215.98 in GSTR 3B for the month of Aug'19. But GSTR 1 was rightly been filed for the said month. In this connection this is also to be noted that outward supply was correctly been shown in GSTR 3B for the said month. The apparent mistake was purely an inadvertent typographical human error and the same has also been rectified and disburse the short output cess through GSTR 3B for the subsequent F.Y. i.e. month of July'20 by debiting electronic credit ledger from before commencement of any proceedings u/s 73 or 74. This is for your information my client has maintained sufficient balance in his electronic credit ledger from Aug'19 to July,20. Now during audit u/s 65 Dept has pointed out the short payment of interest due to delay payment of output cess which i have discussed earlier. Now my question is that is there any possibility to save interest? If yes please share valuable suggestions of yours.

[Amit Agrawal]

@ Shri Giri Gattupalli Ji,

In continuation of my last post at serial No. 19 above as well as my posts in Issue-Id: 118657 bearing subject-line as 'SEC 50 ; CONSTITUTIONAL VALIDITY', following Supreme Court's observations in case of UOI AND ORS. VERSUS IND-SWIFT LABORATORIES LTD. (2011 (2) TMI 6 - SUPREME COURT) are worth noting:

"19. A taxing statute must be interpreted in the light of what is clearly expressed. It is not permissible to import provisions in a taxing statute so as to supply any assumed deficiency. In support of the same we may refer to the decision of this Court in COMMISSIONER OF SALES TAX, UP. VERSUS MODI SUGAR MILLS LTD.   - 1960 (10) TMI 65 - SUPREME COURT wherein this Court at Para 10 has observed as follows:-

"10......... In interpreting a taxing statute, equitable considerations are entirely out of place. Nor can taxing statutes be interpreted on any presumptions or assumptions. The court must look squarely at the words of the statute and interpret them. It must interpret a taxing statute in the light of what is clearly expressed: it cannot imply anything which is not expressed; it cannot import provisions in the statutes so as to supply any assumed deficiency."

20. Therefore, the attempt of the High Court to read down the provision by way of substituting the word "OR" by an "and" so as to give relief to the assessee is found to be erroneous. In that regard the submission of the counsel for the appellant is well-founded that once the said credit is taken the beneficiary is at liberty to utilize the same, immediately thereafter, subject to the Credit rules."

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

[BARUN MUKHERJEE]

Thank you so much to all Ld. participants for valuable suggestions of yours. It will help me to knock higher authority regarding that matter.

[Shyam Naik]

Compensatory nature of interest cannot be brushed aside in my humble view. If interest is not compensatory, is it penal in nature? Is in in effect additional late fee in case of delay in GSTR-3B? Is Additional late fee is being collected camouflaged as interest?

So far collection is concerned, the amount is credit to consolidated fund on the date of challan. The GST collection figure is summation of PMT-06 challan for the given period. These facts has been informed by RBI and CBIC under RTI.

The situation is, Revenue receives the tax on the challan date, but there is no payment of tax on the part of tax payer, which result in absurdity. The collection of interest in case of no loss to revenue can be challenged on the ground of absurdity in my humble view.

[Sadanand Bulbule]

Dear all

The word 'Compensation’ has been defined in P. Ramanatha Aiyar's Advanced Law Lexicon 3rd Edition 2005 page 918 as follows:

"An act which a Court orders to be done, or money which a Court orders to be paid, by a person whose acts or omissions have caused loss or injury to another in order that thereby the person damnified may receive equal value for his loss, or be made whole in respect of his injury; the consideration or price of a privilege purchased; some thing given or obtained as an equivalent; the rendering of an equivalent in value or amount; an equivalent given for property taken or for an injury done to another; the giving back an equivalent in either money which is but the measure of value, or in actual value otherwise conferred; a recompense in value; a recompense given for a thing received recompense for the whole injury suffered; remuneration or satisfaction for injury or damage of every description; remuneration for loss of time, necessary expenditures, and for permanent disability if such be the result; remuneration for the injury directly and proximately caused by a breach of contract or duty; remuneration or wages given to an employee or officer."

Hope this definition might expand understanding of the concept of " compensation".

AI Summary

Interest on delayed tax: liability arises where cess was understated and later corrected by credit ledger, subject to proviso arguments.
Whether interest is payable where cetain cess was understated in a monthly return due to a typographical error and later rectified by debiting the electronic credit ledger before initiation of assessment proceedings. The statutory interest provision ordinarily attracts interest on delayed tax, with a proviso limiting interest to the cash portion when supplies of the same period are declared in a belated return; commentators dispute applicability of that proviso here, contending rectification and original declaration may support the proviso, while others stress the statutory text and precedent sustaining interest on short payment.