2019-07-13_Corporate_Professional_Today

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July 13 To July 19, 2019 u Taxmann’s Corporate Professionals Today u Vol. 45 u 46

Introduction

1. Normally, ‘interest’ is levied by tax authorities where
   there is delay in payment of tax due to be paid by the
   assessee. In GST also, interest is levied for any amount of
   tax due to be paid but the same has not been paid within
   prescribed time.
   As per section 50 of the CGST Act, 2017, every person who
   is liable to pay tax in accordance with the provisions of this
   Act or rules, but fails to pay tax or any part of it to the
   government within the prescribed period, is required to pay
   interest at 18% for the period for which tax or any part of
   it remains unpaid.
   Further, as per Section 49 of the CGST Act, 2017, input tax
   credit (ITC) as self-assessed in the return of a registered
   person should be credited to his electronic credit ledger.
   The amount available in the electronic credit ledger may
   be used for making any payment towards output tax under
   the said Act.
   Now, the question arises whether interest would be levied
   on amount after adjusting or utilizing ITC, i.e., on net tax
   liability or before ITC utilization, i.e., on gross tax liability?

Issue Involved

2. If we go by the literal meaning of the section govern-
   ing payment of interest, then we will find that there is no
   specific indication on whether Interest will be charged on
   Gross tax liability or on Net tax liability?

VISHAL RAHEJA

CA

Interest Computation under GST on

‘Gross Tax’ or ‘Net Tax’

VIDYA KHANNA