Traders Seek No Interest on GST Late Payment: Bhopal

In Bhopal, a total of 75 thousand registered traders accused of making delayed GST payments are now in the eyes of the Central Board of Indirect Taxes and Customs (CBIC). Currently, such taxpayers in the capital have received notices from the CBIC. Out of 75 thousand traders, 50 thousand owed more than Rs. 300 crore. Similarly, in the entire Madhya Pradesh state more than 3 Lakh taxpayers are found guilty of not paying their GST on time. The entire amount owed on them is around Rs. 1000 Crores.

Sources exclaimed that such taxpayers were in the illusion that they won’t be charged for their outstanding tax liabilities but the government is all set to settle their liabilities against the Input Tax Credit (ITC) payable A complete guide for understanding the basics of input tax credit and it calculation with detailed examples under GST (Goods and Services Tax) India to them. The government further claimed that no matter if the tax credit is deposited in the tax credit ledger, if the tax is deposited late then interest will be charged on delay accordingly.

The GST Council rolled out the notices on 1 Feb 2019 saying that there won’t be any interest deductible on paying GST from the tax credit. The rule is still not implemented due to which the liabilities are increasing on the traders. As per the stats given by CBIC, till now, the liability of Rs. 46,000 Crore (including late and non-payment) has been generated.

A trader can pay his GST and show it in his monthly return i.e GSTR 3B form 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?., that is filed on the 20th of every month. Let’s take up an example, a person’s tax liability is Rs. 1 lakh and he hasn’t paid it for 1 year. His tax credit is Rs. 90,000. In the form of the tax credit, he paid 90% of his tax liability and the rest 10% he paid with the late fees. Now the department has deducted Rs. 10,800 ( as 18% interest) on the amount deposited with a tax credit.

Interest in tax credit is not a realistic approach said MP, FMPCCI President Dr. RS Goswami, if the trader is having tax credit that clearly indicates that the amount is already deposited in the accounts of the government on which the government is already earning interest. Therefore in case if the trader is paying off his tax liabilities using the tax credit it is not appropriate for the government to surcharge it with additional interest as it is already earning interest from the bank. The government is expected to clear the rules in regard to the matter.

The notification came out from the side of Bhopal Tax Law Bar Association on 1 Feb 2019 in which President S. Krishnan clearly stated that on accounts of late GST payments 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, no taxpayer is liable for paying any interest if the tax is paid off by the tax credit. The law still remains to be implemented thus making the traders suffer.