Interest applicability on delayed payment of tax
Recently, the CBIC vide letter addressed to its Principal Chief Commissioners and Chief Commissioners of GST has clarified that interest is payable on gross tax liability and amendment in Section 50 of the Central Goods and Services Tax Act, 2017 (‘CGST Act’), which provides for interest on net liability, will be prospective in nature. On the other hand, the Madras High Court in the case Refex Industries Limited, 2020-VIL-71-MAD has held that the amendment will be retrospective in nature and interest should be applicable on net component only.
We are happy to share our Managing Partner, Puneet Bansal’s view through short video on this issue, available at https://youtu.be/IvA5hzVGGHM . In this video, Puneet has lucidly explained the underlying legal provisions, judicial pronouncements on the issue as well as the next steps for taxpayers. The presentation used in the video is also appended to this mail for your ready reference.