Interest on Late Filing of GSTR-3B

[Shyam Naik]

Rule 88B was amended not no collect interest for delayed filing of GSTR-3B, if there is sufficient balance in the Electronic Cash Ledger with effect form 10.07.2024. The question is whether the amendment is curative in nature and therefore retrospective. Whether, not giving effect to the amendment from 01.07.2017 would amount to perpetuating the interest collected, which was not due and amounts to violation of Art 265 and 300A.

In the agenda for the 53rd Council Meeting, it is stated collection of interest for mere delay in filing GSTR-3B, in cases of sufficient balance in Electronic Cash Ledger does not seem fair and amounts to collection of interest on tax already received by Government.

In all fairness, the amendment should have been given retrospective effect from inception and the Council / Government should have shown magnanimity, which could have put an end to the litigation lying at various forums, including writ petitions before High Courts.

The Hon'ble High Court of Gujarat, in the case of Arya Construction 2024 (7) TMI 239 - GUJARAT HIGH COURT has ruled in favour of petitioner. The revenue has accepted the judgment. A retrospective effect to the amendment would have been respect to the Rule of Law.

The prospective amendment appears to be too late and half hearted.

AI Summary

Debate Over Retrospective Application of Rule 88B Amendment on Interest for Delayed GSTR-3B Filings Raises Legal Questions A discussion on the amendment to Rule 88B regarding interest on delayed GSTR-3B filings highlights differing views on its retrospective application. The amendment, effective from July 10, 2024, exempts interest if there's sufficient balance in the Electronic Cash Ledger. Some argue it should apply retrospectively from July 1, 2017, to prevent undue interest collection, aligning with the Gujarat High Court's favorable ruling. Others contend it's not fit for retrospective effect and suggest legal recourse for grievances. The amendment is seen as clarificatory, not introducing new law, raising questions about potential refunds for previously paid interest.