Interest us/ CGST 50(3)

Kallol Sarkar (Accountant) (188 Points)

09 November 2022  

Interest Rate on ITC wrongly availed & utilized under Section 50(3) of CGST Act has been reduced from 24% to 18%. This is done via Finance Act 2022 under clause 111,116 along with sixth schedule.

But I don't find any CGST notification for this change of interest rate from 24% to 18%..Usually changes in CGST/IGST proposed in finance act every year are subsequently declared by CBIC through separate notifications under CGST/IGST.

But for this particular case of interest rate change, no notification is found in CGST. Why?

Extract of Finance Act 2022

111. In section 50 of the Central Goods and Services Tax Act, for sub-section (3), the
following sub-section shall be substituted and shall be deemed to have been substituted
with effect from the 1st day of July, 2017, namely:––
“(3) Where the input tax credit has been wrongly availed and utilised, the
registered person shall pay interest on such input tax credit wrongly availed and
utilised, at such rate not exceeding twenty-four per cent. as may be notified by the
Government, on the recommendations of the Council, and the interest shall be calculated,
in such manner as may be prescribed.”.

116. (1) The notification of the Government of India in the Ministry of Finance
(Department of Revenue) number G. S. R. 661(E), dated the 28th June, 2017, issued by the
Central Government on the recommendations of the Council, under sub-sections (1) and (3)
of section 50, sub-section (12) of section 54 and section 56 of the Central Goods and Services
Tax Act, 2017, shall stand amended and shall be deemed to have been amended retrospectively,
in the manner specified in column (2) of the Sixth Schedule, on and from the date specified in
column (3) of that Schedule.


[See section 116(1) ]

Notification number and date                       Amendment                                       Date of effect of amendment
               (1)                                                    (2)                                                              (3)
G.S.R 661 (E), dated                             the In the said notification, in the Table,            1st July, 2017.
28th June, 2017                                    against serial number 2, in column (3),
[No.349/72/2017-GST,                           for the figures “24”, the figures “18
dated 28th June, 2017]                          shall be substituted.