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Interest notice

Nikita Jain (Job) (36 Points)

30 May 2019

What to do if u get a notice to pay interest on gross liability of gst?? To wait for the clarifiaction or deposit?

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10 Replies

CA Altamush Zafar (GST Consultant) (15921 Points)
Replied 30 May 2019

If it is a valid demand then pay. If it is not valid then give a reply

Nikita Jain (Job) (36 Points)
Replied 30 May 2019

Dey are charging interest on gross liability . Without giving itc.. though after itc.. net liability is nil.. is it valid?

CA Altamush Zafar (GST Consultant) (15921 Points)
Replied 30 May 2019

Has the liability been paid late

Nikita Jain (Job) (36 Points)
Replied 30 May 2019

Yes.. rtrn was filed late.. bt net liability was nil

CA Haritha Komma (Chartered Accountant) (1147 Points)
Replied 30 May 2019

As per the recent case law also, the GST needs to be paid on gross liability. Though there was a press release proposing interest on net liability, the same was not notified.

Anyway interest amount do not change if it is paid now or later. Can wait for clarification and reply to the letter..

CA Altamush Zafar (GST Consultant) (15921 Points)
Replied 30 May 2019

Can you tell me which place the tax payer belongs

Nikita Jain (Job) (36 Points)
Replied 30 May 2019

Rajasthan

CA Altamush Zafar (GST Consultant) (15921 Points)
Replied 30 May 2019

That is impressive on part of department. Yes its a valid demand as payment will only be valid when you actually make payment from itc ledger or cash ledger. Availability of the balance in either of the ledger doesn't ensure payment. So interest on gross amount. There is a press release that it will be amended in the law such that interest should be paid on net amount. But doesn't mean a thing untill the act is actually amended and this may take quite some time.

Nikita Jain (Job) (36 Points)
Replied 30 May 2019

Ok..thanks

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Pankaj Rawat (GST Practitioner) (55037 Points)
Replied 30 May 2019

As per the existing provisions, its on the gross liability, though harsh

GST council has proposed charging interest on net liability, In 31st GST Council Meeting but it has not been affected by any amendment or notification & Moreover the Talangan High Court Judgement came on to charge Interest on Gross Liability.
Hence charge on Gross .

Note : Delhi high court, wires of the provision has also been challenged , hope to see some positive results !
Next hearing is fixed on 30.09.19