Itc and interest related

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This discussion concerns whether interest is payable when IGST was wrongly claimed in September 2017 and used against CGST and SGST, despite sufficient CGST and SGST credit being available. The GST Council recommended an amendment to Section 50 of the CGST Act, effective from July 1, 2017, which clarifies that interest is only applicable to the net tax liability paid from the electronic cash ledger, not the portion settled using input tax credit.

CA. Ajeet Patel

CA. Ajeet Patel (Querist)
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05 September 2020 In sep 2017 igst wrongly claimed rs 4600456/- by mistake and used against cgst and sgst. Is interest is payble? Although Sufficient cgst and sgst is already accumulated in credit ledger. As per gstin site in 2017 libilities was first adjusted with igst. Cgst and sgst is accumulatimg in continue in credit ledger and libilities is adjusted with wrong igst taken. At the year end 2300228/- cgst and same sgst accumulated in credit ledger.

Please clarify..

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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05 September 2020 No interest is payable in such a case.

CA. Ajeet Patel

CA. Ajeet Patel (Querist)
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17 September 2020 Any notification regarding this

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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18 September 2020 The 31st GST Council meeting recommended changing this Law to provide that only the net liability of a taxpayer would hereafter be subjected to interest. This amendment to the Central Goods and Services Tax Act, was presented under the Finance Bill, 2019. Under this new amendment governing section 50 of the Act, interest will now be charged on only that portion of the GST liability which is paid by debiting the electronic cash ledger. In other words, the portion paid using cash, bringing much desired relief to taxpayers.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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19 September 2020 *CBIC issues Instructions to Recover Interest on Net Cash Tax Liability w.e.f. July 01, 2017*

*Read More at:* https://www.a2ztaxcorp.com/cbic-issues-instructions-to-recover-interest-on-net-cash-tax-liability-w-e-f-july-01-2017/

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