Intrest on Delay Payment to Supplier

[NILESH PITALE]

Dear Expert

In One My Client Case, Department GST Audit has Done, After Audit They have Raised Audit Para in respect of Interest Payable As per Section 16 2(D) for Late Payment to Supplier After 180 Days, ---In Our Reply we submitted that that we are currently contesting this liability. Our stand is based on the ongoing legal deliberations regarding the constitutional validity of interest levies in such cases. Specially we are awaiting the final decision of the Hon'ble Gujarat High Court in the matter of Priya Blue Industries Pvt. Ltd Vs Union of India which deals with similar subject matter.'

Now they Have Issue SCN Demanding Penalty U/s 122 and 74 which is Equivalent to tax along with interest.

Our Question

1) Can We pay Interest Under Protest As per Audit Para

2) Can GST Department Issued SCN for Penalty

3) is there any chance to come out Decision in favour of Taxpayer in (Priya Blue Industries Pvt. Ltd)

Please Guide

Please Guide how to ta

AI Summary

GST interest on delayed supplier payment raises questions on protest payment, penalty notices, and tax-equivalent demand. Interest liability under GST is questioned where input tax credit is linked to delayed payment to a supplier beyond the stipulated period, and the taxpayer is contesting the levy while awaiting a judicial determination on the constitutional validity of such interest demands. The dispute also concerns whether payment of interest may be made under protest in response to an audit objection, and whether a show cause notice can validly invoke penalty provisions and a tax-equivalent demand in connection with the same alleged default.