Every legislature which contain the provisions for collection of taxes, duty or other amount also contains the provisions for interest on late payment or non-payment of such amount.
Just like other legislatures, GST Act also contains the provision for levy of interest on delay or non-payment of GST. However, quantum of interest to be levied is under dispute from first day of introduction of GST in India. Dispute is whether GST will be charged before adjusting ITC (on Gross Liability) or after adjusting ITC (Net Liability).
To resolve the above issue , amendment was carried out in Section 50 of the Delhi GST Act through Section 10 of the Delhi Goods and Services Tax (Amendment) Act, 2019 (Delhi Act 06 of 2019). Section 10 of said Act provides for amendment in section 50 of Delhi GST Act, 2017 and introduced proviso to section 50 which provides that interest shall be charged on that portion of tax that is paid by debiting the electronic cash ledger. However, notification for enforcing the above amendment was not issued due to which the proviso to Section 50 was not effective.
This much awaited Notification for enforcing the provisions of Section 10 of the Delhi Goods and Services Tax (Amendment) Act, 2019 has now been issued vide Notification No. 63/ 2020-State Tax dated 19.11.2020. The provision of Finance Act as per Notification will be effective from 1st September, 2020.
GST: Recover interest from July,1, 2017 only on Net Cash liability: CBIC issues Instructions
READ NOTIFICATION:
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Frah Saeed is a law graduate specializing in the core field of indirect taxes and is the Co-founder of taxwallah.com. She has authored many publications on GST and is into full-time consultancy on GST to big corporates. She as a part of taxwallah.com heads a team comprising of Chartered Accountants and Advocates and plays a key role in our mission to disseminate GST knowledge to all.
