Gst interest for January 2020 return-3B

Although not notified yet, it is clear that the notification would be made applicable retrospectively (from 1st July 2017). Also Refex Industries - High Court case also supports this view. If the department demands interest, it could be disputed and payment should be on the Net basis only.

Academic thought process - Section 50(1) provides for liability of such period disclosed in a delayed fashion in such period return, i.e. March 2020 liability shown in March 2020 GSTR 3B but filed after the due date. 

Therefore, based on strict interpretation, can the department say as liability was not disclosed in the appropriate month interest is applicable on gross basis and the amendment in law does not cover such scenarios? (Disputable but my opinion is still net liability basis)

DEAR SIR CA AKSHAY JI

THERE IS JUDGEMENT IN MEGHA ENGINEERING & INFRA- TELANGANA HIGH COURT HELD THAT INTEREST APPLY ON GROSS LIABILITY.

YES I AGREE  WITH YOU THAT  ITS DISPUTABLE CAN BE CHALLENGE, BUT MY VIEW IS, IF INTEREST AMOUNT IS NOT MUCH THEN SHALL BE DEPOSITED ON GROSS ONLY TO AVOID UNNECESSARY LITIGATION.

Noted Pankaj ji. Both the decisions came out before the retrospective amendment in the law. (although yet to be made official through notification). 

Another view is to pay the interest on net liability and await notice from the department. Recent Jharkhand HC ruling available that interest cannot be recovered before adjudication proceedings. The department may not pursue the issue if interest paid on net basis. 

SIR

I AGREE ..... WHAT ABOUT THAT DEPARTMENT CALLING TAXPAYER & ASKING THEM TO DEPOSIT INTEREST ON GROSS.

Not a valid communication. Ask them to raise a valid notice, if not politely inform them that it is not required and what they ask is beyond the law.

SIR

WHEN ITS DISPUTABLE THEN HOW IT CAN BE BEYOND THE LAW.... MOREOVER MANY  TAXPAYER ARE READY TO DEPOSIT THE SAME ON GROSS WHEN THEY RECEIVED SUCH CALLS FROM DEPARTMENT.

ANYWAY THANKS FOR YOUR VALUABLE SUGGESTIONS & ALWAYS APPRECIATE THE WAY YOU REPLY TO QUERIES . LOT TO LEARN FROM YOU  

Thank you sir. In my view it should not be disputable, as the concept of interest cannot apply when money is with the govt. in the form of ITC. Also, once paid refund would not be given, therefore when we are suggesting to clients, we must see the optimum way out. If it is negligible value, yes what u say may be taken but client must be given the data to make an informed decision.

Thank you for your words