The CBIC has issued Central Goods and Services Tax (Amendment) Rules, 2022 vide Notification No. 14/2022- Central Tax dated 5th July, 2022.
Amongst various amendments in the CGST Rules, 2017 one of the important amendment is insertion of Rule 88B regarding levy of interest on GST on late payment of GST and wrong availment of input tax credit. It is pertinent to mention here that that the above new Rule has been inserted with retrospective effect with effect from 1st July, 2017.
For ready reference of our readers the new Rule is reproduced as under:
88B. Manner of calculating interest on delayed payment of tax.-
(1) In case, where the supplies made during a tax period are declared by the registered person in the return for the said period and the said return is furnished after the due date in accordance with provisions of section 39, except where such return is furnished after commencement of any proceedings under section 73 or section 74 in respect of the said period, the interest on tax payable in respect of such supplies shall be calculated on the portion of tax which is paid by debiting the electronic cash ledger, for the period of delay in filing the said return beyond the due date, at such rate as may be notified under sub-section (1) of section 50.
(2) In all other cases, where interest is payable in accordance with sub section (1) of section 50, the interest shall be calculated on the amount of tax which remains unpaid, for the period starting from the date on which such tax was due to be paid till the date such tax is paid, at such rate as may be notified under sub-section (1) of section 50.
(3) In case, where interest is payable on the amount of input tax credit wrongly availed and utilised in accordance with sub-section (3) of section 50, the interest shall be calculated on the amount of input tax credit wrongly availed and utilised, for the period starting from the date of utilisation of such wrongly availed input tax credit till the date of reversal of such credit or payment of tax in respect of such amount, at such rate as may be notified under said sub-section (3) of section 50.
Explanation.—For the purposes of this sub-rule, —
(1)input tax credit wrongly availed shall be construed to have been utilised, when the balance in the electronic credit ledger falls below the amount of input tax credit wrongly availed, and the extent of such utilisation of input tax credit shall be the amount by which the balance inthe electronic credit ledger falls below the amount of input tax credit wrongly availed.
(2)the date of utilisation of such input tax credit shall be taken to be, —
(a)the date, on which the return is due to be furnished under section 39 or the actual date of filing of the said return, whichever is earlier, if the balance in the electronic credit ledger falls below the amount of input tax credit wrongly availed, on account of payment of tax through the said return; or
(b) the date of debit in the electronic credit ledger when the balance in the electronic credit ledger falls below the amount of input tax credit wrongly availed, in all other cases.
With insertion of Rule 88B the CBIC has clarified that taxpayers are liable to pay interest only if they utilized the wrongly availed Input Tax Credit for the payment of GST liability. They announce a retrospective relief measure for taxpayers in this regard.
READ / DOWNLOAD NOTIFICATION : CLICK HERE
****
Don’t miss the next Tax Update / Article / Judicial pronouncement
Subscribe to our newsletter for FREE to stay updated on GST Law
Resolve your GST queries from national level experts on GST free of cost.
TW Editorial Team comprises of team of experienced Chartered Accountants and Advocates devoted to spread the knowledge of GST amongst the various stakeholders.
