Interest under Section 50 of CGST Act

[Kishor Deshpande]

One of my client filed his GSTR 1 for the month of August 2021 within due date showing tax liability.  There were on tax credit to be claimed for the said tax period and he paid entire tax by cash. However, in GSTR 3B filed for the said period, tax liability was shown as zero and the balance remained in cash ledger. Then after, the said cash balance was not utilized for the payment of tax in any tax period. After that we received notice in ASMT 10. So, on receipt of ASMT 10, DRC 03 was filed. The question is that since cash balance was not utilized till filing DRC 03, dealer is liable to pay interest upto filing of DRC 03 ?

AI Summary

Interest under Section 50(1) payable for delayed GST payment; accrues from due date until actual payment despite DRC-03 A taxpayer reported tax liability in their outward return and funded it by cash ledger but declared zero liability in the corresponding return, leaving the cash balance unused; after an assessment notice they paid via DRC-03. The forum view: interest under Section 50(1) of the CGST Act is payable for delayed payment and accrues from the due date until actual payment, and must be discharged even if no show-cause notice is issued. Filing DRC-03 and self-payment does not eliminate interest liability; compute and pay interest up to the date of payment.