Interest on Delayed Payment of GST Arises by Operation of Law and Cannot be Waived by Courts

Last updated: 03 August 2026

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The Karnataka High Court has ruled that interest on delayed Goods and Services Tax (GST) payments is automatically levied by law and cannot be waived by tax authorities or courts. This decision overturned a previous order that had directed the waiver of interest, penalties, and limitations for a sub-contractor. The court clarified that disputes regarding the increased tax burden due to the GST regime are contractual matters between parties, not grounds for waiving statutory tax liabilities.

Court :
Karnataka High Court

Brief :
The Hon’ble Karnataka High Court in The Commissioner of Central Tax & Ors. v. M/s. Sadguru Infratech Pvt. Ltd. [Writ Appeal No. 1076 of 2023 (T-RES) dated June 10, 2026] set aside the order passed by the Learned Single Judge to the extent it issued blanket directions to the Revenue to waive interest, penalty, and the limitation for filing returns/revised returns in respect of delayed returns and payment of tax by a sub-contractor, and held that the liability to pay interest on delayed payment of tax under a fiscal statute arises by operation of law, leaving no discretion in the authority to waive or reduce it, where the statute makes no such provision.

Citation :
Writ Appeal No. 1076 of 2023 (T-RES) dated June 10, 2026

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1 Year PLAN - Rs.~~1999~~

1799

(Excl. of GST ₹323)

2 Years PLAN - Rs.~~3499~~

3149

(Excl. of GST ₹566)

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3 Years PLAN - Rs.~~4999~~

4499

(Excl. of GST ₹809)

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Attached File : 671907_6054_01_sadguru_infratech_pvt_ltd.pdf

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Judgement posted by

Bimal Jain

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FCA, FCS LLB with21 Yrs of Experience inTaxation Indirect and Direct: Education Qualification: B.Com (Hons) Chartered Accountants Company Secretary LLB Qualified SAP FI/CO Consultants Professional Membership: Chairmanof Indirect Tax Committee of PHD Chamber of Commerce Member of Indirec ... Read more

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