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FM Announcements: 24th March 2020


Fake Notification being circulated on social media about GST date extension.


GST Council 39th Meeting - Press Release 14th March 2020


Clarification by CBIC on whether interest to be charged on Gross Tax Liability or Net Tax Liability?


Extension of time limit for submitting the declaration in FORM GST TRAN-1 under rule 117(1A) in certain cases


Budget 2020 : Highlights


Due date of GSTR-9 and GSTR-9C for FY 2017-18 - Extension




Now the GST Taxpayers can file their GSTR-3B Returns in a Staggered Manner


Tax Audit due date extension AY 2019-20


GST Council 37th Meeting Update


Corporate tax rates slashed to 22% for domestic companies and 15% for new domestic manufacturing companies and other fiscal reliefs


Fake Input and refund of IGST on exports - crackdown by DGGI and DRI


GST Council may Scrap GSTR-9 and GSTR-9C for FY 17-18 for small taxpayers upto 5 crore turnover


Changes in 36th GST Council Meeting held on 27th July 2019


CMP-08 due date for quarter April 2019 to June 2019 extended till 31st July 2019


Press Release restricting the last date for availing ITC for FY 2017-18 is illegal : Gujarat High Court


Budget 2019 Highlights - 05 July 2019


Transfer of GST amount from one head to other head (Form GST PMT - 09)


DGGST arrests one person for availing and passing fake ITC of Rs.16 Crore.

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Clarification by CBIC on whether interest to be charged on Gross Tax Liability or Net Tax Liability?

CBIC has provided a clarification by its twitter handle on the issue.
"There are some discussions in social media w.r.t. interest calculation on delayed GST payments post a few media reports regarding Rs. 46000 Crore interest on the delayed GST payments to be collected by tax authorities. On this issue of interest calculation, it is clarified that-
The GST laws, as of now, permit interest calculation on delayed GST payment on the basis of gross tax liability. This position has been upheld in the Telangana High Court’s decision dated 18.04.2019 in the case of Megha Engineering And ... vs The Commissioner Of Central Tax. In spite of this position of law and Telangana High Court’s order, the Central Government and several State Governments, on the recommendations of GST Council, amended their respective CGST/SGST Acts to charge interest on delayed GST payment on the basis of net tax liabilitySuch amendment will be made prospectively. The States of Telangana and West Bengal are in the process of amending their State GST Acts. After the process of amendment is complete, the changed provisions can be put in operation for the entire country."
Author's Note:
Therefore the crux of above clarification is that -
a) An amendment shall be made in the law to charge interest on Net Tax Liability instead of Gross Tax Liability.
b) Such an amendment shall be effective prospectively i.e. effective for the priod falling after the date of amendment.
c) For the period precceding to the date of amendment, interest shall be charged on the Gross Tax Liability.
Though, It is appeciated that govt has finally waken up and dediced to make an amendment in the law, however restricting its effect for the post amendment period only is not justified at all. There is no sense in charging interest on the GST already paid by taxpayer in the form of ITC on inward supplies, which is already lying in the govt treasury.
Reader's views on the same are requested. 

Posted By:

CA Mohit Jain

| Date 15-02-2020


Thanks for the information.

Posted By: Kajal | Date: 15-02-2020
The interpretation put upon the provisions in sec 50 of the GST Act by the Telengana High Court and any move to give prospective validity to the amendment subsequently brought in are unconstitutional. Even despite any such amendment the interpretation to charge interest on the gross amount without deducting IPT is ultravires the the Statute. It is against the whole concept of GST. Further, the Legislature having come out with the amendment to remove the mischief in the law, it is remedial and clarificatory in nature with retrospective effort. Any attempt by the legislature to construe the provisions against assessees cannot stand the test of legal principles. Nevertheless, the GSTN Council has to come up with clarification for giving retrospective effect to the amendment rather than putting the taxable persons across the Country to the vegaries of the Tax authorities by implementing the draconian provisions. Despite strong case for favourable decision to dealers the process of appeal/writ remedies will be onerous. Let us hope the Government will resolve the issue in a pragmatic manner.

Posted By: Adv K.N.Sreekumar | Date: 16-02-2020

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