Center is Now Seeking Interest on GST Late Payment

Adamant to revive the GST collection, the government has now designed the roadmap that will lead them to gather Rs. 46,000 crores under interest on late payments. Protesting against the decision of the government, tax experts said that at the time of GST (Goods and Services Tax) implementation when the government was making taxpayers switch to the contemporary tax regime promised that there will be no penalties or interest on late filing of GST returns Check out due dates of payment under GST for general and composition taxpayers in India. We have included penalty charges on late payment with interest. Adding on to the allegation they said that the administration is now adopting the rudest policies in order to fill the national treasury.

Heading on towards their mission to revive the collection, the government has commanded all the local tax authorities to target the taxpayers who are challenging the demand. A.K. Pandey (Special Secretary and Member, CBIC) has already extended the notices to the entire force of principal chief commissioners and central tax commissioners saying that they must bring in the taxpayers under interest liability net on account of late payment of tax.

According to the notice, the procedure of recovering the amount payable under interest on delayed payments is duly mentioned u/s 79 of CGST Act adhering to which the tax officers will proceed to recover the interest amount from the concerned taxpayers. The notice also mentioned that on 1 Feb 2020, the Principal ADG System generated and diffused the list of taxpayers (according to GSTIN) who are deemed of sidelining their due interest liabilities while filing their belated GSTR 3B returns GST council decided GSTR 3B filing until March 2019 in the 27th meeting. We researched and published some interesting points that why Indian government extended GSTR 3B every time?.. Following the examination of the said report, the conclusion was derived that the interest of ₹45,996 crores is still unpaid to the government on account of delayed tax payments.

The report id uploaded on SFTP so that the process of recovering the unpaid interest can be started as early as possible in the way designated under the clause of section 79 read with section 75(12) of the CGST Act. There are still debates on whether the interest will be computed based on the gross tax liability or the net cash liability. In such a context where determining the amount of payable tax is a question, the clause of Sec 50 of the CGST Act is applied which said that the amount of interest will be determined based on the tax liability that paid belatedly. The interest can either be revived in the form of cash or through deductions in the Input Tax Credit A complete guide for understanding the basics of input tax credit and it calculation with detailed examples under GST (Goods and Services Tax) India. So clearly the interest will be calculated on the total tax liability mentioned in Form GSTR 3B, said the notice.

Paying heed to the current situation, you are requested to investigate the matter personally and urge your department on the field to recover the amount under interest from the liable taxpayers and present weekly reports of your progress in this regard, said the notice.

Alike some tax experts, Rajat Mohan (Senior Partner, AMRG & Associates) also commented that the proposed clause is in opposition to the taxpayers who were once promised by the government for support at the time of roll-out of the GST. The situation is highly challenging for the taxpayers and if the government is willing to put a surcharge then it should be on the net tax liability and not the gross tax liability, said Rajat Mohan.