Interest on GST liability

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If you've paid your GST liability on time but haven't filed your returns, you may be liable for interest, not just late fees. GST authorities may argue that the funds in your cash ledger haven't reached the government exchequer until returns are filed. While late fees are standard for delayed filing, interest can also be applicable in such scenarios, as supported by certain legal interpretations and case law like Vishnu Aroma Pouching Pvt. Ltd. vs Union of India.

Madhan

Madhan (Querist)

25 August 2021 We are in a situation that we have paid the GST liability on time but not filed the GST returns. Do I need to pay interest for non filing of returns? or is it ok to pay late fees?

CMA Poornima Madhava

CMA Poornima Madhava (Expert)

25 August 2021 I think only late fee applicable in this case.

Madhan

Madhan (Querist)

25 August 2021 Thank you for the reply, but GST personnel demanding to pay interest because the amount deposited in cash ledger belongs to the company not credited to Government exchequer untiled filled the GST returns. Please provide any supporting case laws if available.

Udaya Chandran

Udaya Chandran (Expert)

25 August 2021 As per the GST Act, yes, interest is to be paid in case the return is not filed even the payment is made in e-cash ledger. However you can contend it through writ only. Refer to the case law of Messrs Vishnu Aroma Pouching Pvt. Ltd. Vs Union of India (Gujarat High Court) - Appeal Number : R/Special Civil Appeal No. 5629 of 2019

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