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Interest U/s 59 of the GST Act

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subhagan sreerangam

5046 Points Posted on 16 July 2020

Late fee paid on belated filing of GSTR 3B.There is no Tax liability after deducting the ITC.Is there an interest liability in this matter as per section 50 of the GST Act.

Replies (2)

Quick Summary

This discussion clarifies interest liability under Section 50 of the GST Act for late filing of GSTR 3B. Even if you have sufficient Input Tax Credit (ITC), interest may still be applicable on the net cash tax liability. An amendment, though not yet notified, aims to make interest applicable only on tax paid in cash retrospectively from July 1, 2017. It is advised to discharge interest on the net liability after ITC set-off, which is typically 18%.

CA Akshay Hiregange

Partner - Audit & Assistance

3708 Points Posted on 16 July 2020

Can be said to be not applicable. Amendment to GST Act yet to be notified, although it has been clearly decided that interest will be applicable on tax payable in cash only u/s 50 of CGST Act restrospectively from 1st July 2017. Suggest to discharge on net liability only (after ITC set off)