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.

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.