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Interest u/s 50

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Laxmi Narayan Dhoot

21 Points Posted on 15 May 2020

is interest leived on gross liability or net liability ??
considering proviso to sec 50 it should be chargeable on net tax liability
is any official notification for such has came in the ACT??

Replies (3)

Quick Summary

This discussion clarifies the confusion surrounding GST interest under Section 50. While the Act technically states interest is on gross liability, the 39th GST Council meeting in March 2020 clarified it should be on net tax liability. However, the proviso to Section 50(1) enabling this is not yet notified. High Court judgments suggest it should be on gross liability, but for practical purposes, especially with smaller amounts, calculating on net liability is often considered.

CA RAHUL JAIN RJ

CHARTERED ACCOUNTANT

191 Points Posted on 15 May 2020

Net liabity

Shivam RC

Student

7666 Points Posted on 15 May 2020

Interest is levied on "NET TAX LIABILITY". The same was also clarified in the 39th GST Council Meeting held on 14th March 2020.

Pankaj Rawat

GST Practitioner

29904 Points Posted on 16 May 2020

As per Act , shall be on Gross liability.
The proviso being inserted under Section 50(1) is not Notified yet.

Yes in light of few high court judgements it should be levy on Gross liability.

Note : In my view if the Interest amount is not much then it's better to compute on Gross else can be compute on Net.