TaxTMI 
TaxTMI 
TaxTMI 
Interest Applicability U/S 50(3)
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....nterest Applicability U/S 50(3)<br> Query (Issue) Started By: - Ashiesh Prremji Dated:- 7-5-2020 Last Reply Date:- 8-5-2020 Goods and Services Tax - GST<br>Got 5 Replies<br>GST<br>Dear Sir, whether interest rate @24% mentioned u/s 50(3) is applicable on reversal of any excess claimed ITC or we need to pay @18% only ? Thanks, Reply By Rachit Agarwal: The Reply: In this case there are two views ....
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.... 1. On plain reading of the provisions intrest is payable @ 24% on the reversal of any excess ITC claimed. Further plea may be taken no interest is payable in a situation whether the credit has been availed and have neven been utilized as held by Hon'ble Patna High Court in a Writ Petition filed by Commercial Steel Company pronounced in post GST Regime. 2. Other view is that since the assess....
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....ee has availed the excess credit, hence the same becomes payable. All the tax which become payable shall be liable to interest @ 18% Reply By KASTURI SETHI: The Reply: Section 50(1) of CGST Act talks of payment of tax along with interest "on his own", then rate of interest is 18%. ( It implies that when the registered person acts in a bona fide manner manner.) Otherwise in all the rema....
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....ining situations, rate of interest is 24 %. Remaining situations are well explained in Section 50(3) to be read with Section 42(10) & 43 (10) i.e. reduction in output tax liability, undue utilisation, mala fide action etc. Reply By KASTURI SETHI: The Reply: In simple words, if tax has not been paid due to technical lapse, clerical error etc. and the same has been paid on one's own (without a....
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....ny intervention from the department), 18% is applicable and if evasion of tax has taken place with mala fide intention, rate of interest is 24 %. Excess and undue ITC availed and utilized is also a sort of evasion of tax. Reply By Spudarjunan S: The Reply: Dear Ashiesh ji, In addition to the view of the experts above, you may also consider the below points - Interest of 24% u/s 50(3) applies o....
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....nly when there is a scenario referred u/s 42(10) or 43(10) of CGST Act, 2017 which is not possible as of today due to deferment in implementation of GSTR-2. As there is no provision of interest on interest, you may always opt to pay interest @ 18% considering such reversal of excess credit as failure to payment of liability (If you have not utilised such excess availed credit, you amy also litiga....
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....te on entire interest). As the difference of 6% would not change even if you are paying today or after 72 months. Reply By Ashiesh Prremji: The Reply: Thank You very much to all of you for interpreting content of above provision, I really appreciate your effort !<br> Discussion Forum - Knowledge Sharing ....