GST Update – Amendment to section 50 of CGST Act notified to levy interest on net GST liability in cash
Blog: NASSCOM Official Blog
Central Board of Indirect Taxes and Customs (‘CBIC’), vide issue of Notification No. 63/2020–Central Tax dated 25 August 2020 has given effect to provision of section 100 of the Finance (No. 2) Act, 2019 to amend Section 50 of CGST Act, 2017 w.e.f September 1, 2020.
As per the amendment, interest on delayed payment of GST shall be levied on net tax liability after giving effect to Input Tax Credit (ITC) utilized for payment of taxes i.e. on GST portion discharged in cash.
It may be noted that GST Council in its 39th Meeting held I March 2020 recommended that amendment in Section 50 of CGST Act, 2017 would be made applicable retrospectively i.e. 1 July 2017.
Considering the GST Council’s decision to apply the amendment retrospectively, CBIC has also issued a Press Release on 26 August 2020 to clarify that no recoveries of interest will be made even for the past period in line with GST council’s decision in 39th meeting.
The amendment would come as a relief to tax payers. amidst the COVID pandemic. However, this could also result in hardship for the taxpayers who have discharged interest on the gross tax liability.
We trust you will find the update useful.