Interest calculation on delayed gst payment based on gross/net GST liability-CBIC Clarification

Interest calculation on delayed gst payment based on gross/net GST liability-CBIC Clarification 

CBIC through its official twitter handle has justified the levy of interest on delayed payment based on gross GST liability by issuing following clarification:

There are some discussions in social media w.r.t. interest calculation on delayed GST payments post a few media reports regarding Rs. 46000 Cr interest on the delayed GST payments to be collected by tax authorities. On this issue of interest calculation, it is clarified that

(i) 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

(ii) 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 liability.

(iii) Such 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.

• CBDT extends due date of tax audit for FY 2025-26 to 21st October 2026
• Denying accumulation of u/s 11(2) merely on grounds of delay in filing Form No. 10 is unsustainable
• Engagement of 05 Young Professionals CAs at Central Registrar of Cooperative Society
• AO can’t take two different stands on immunity u/s 270AA(2) for a same transaction
• ITAT held 2000 gram jewellery reasonable in view of customary practices & CBDT Instruction