Interest provisions in GST law are covered under section 50(1) and section 50(3) of Central Goods and Services Tax Act, 2017.
Section 50(3) specifies that interest rate should not exceed 24% p.a. and intends to exclusively cover cases of contravention as per section 42 (10) and section 43 (10). Whereas section 50 (1) is a residuary section which covers all cases other than cases falling under section 50 (3). Interest rate specified u/s 50 (1) is 18% p.a.
1. Interest u/s 50 (3) are to be charged @ 24% p.a. only in case of reclaim of credit reversed earlier. Only cases covered u/s 42 (10) and 43 (10) are covered in section 50 (3).
2. In other cases interest will be paid @ 18% p.a. u/s 50 (1).
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