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    Delayed Payment of Tax - Taxguru - in

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    sukantabera215
    The document discusses the rate of interest applicable on input tax credit (ITC) reversal, delayed payment of GST, and interest on the next tax liability. It clarifies that the rate of interest on wrongly availed and utilized ITC is 18% retroactively from July 2017. The rate of interest on delayed GST payment is also 18% retroactively from July 2017. For interest on the next tax liability, which is the amount paid in cash after adjusting ITC, the computation method has been clarified through retrospective amendments made in 2019, 2021, and 2022 Finance Acts. Understanding these interest rates and amendments is important for accurate GST compliance.

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    Delayed Payment of Tax - Taxguru - in

    Uploaded by

    sukantabera215
    9 views2 pages
    The document discusses the rate of interest applicable on input tax credit (ITC) reversal, delayed payment of GST, and interest on the next tax liability. It clarifies that the rate of interest on wrongly availed and utilized ITC is 18% retroactively from July 2017. The rate of interest on delayed GST payment is also 18% retroactively from July 2017. For interest on the next tax liability, which is the amount paid in cash after adjusting ITC, the computation method has been clarified through retrospective amendments made in 2019, 2021, and 2022 Finance Acts. Understanding these interest rates and amendments is important for accurate GST compliance.

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    delayed payment of tax- taxguru.in

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    The document discusses the rate of interest applicable on input tax credit (ITC) reversal, delayed payment of GST, and interest on the next tax liability. It clarifies that the rate of interest on wrongly availed and utilized ITC is 18% retroactively from July 2017. The rate of interest on delayed GST payment is also 18% retroactively from July 2017. For interest on the next tax liability, which is the amount paid in cash after adjusting ITC, the computation method has been clarified through retrospective amendments made in 2019, 2021, and 2022 Finance Acts. Understanding these interest rates and amendments is important for accurate GST compliance.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    9 views2 pages

    Delayed Payment of Tax - Taxguru - in

    Uploaded by

    sukantabera215
    The document discusses the rate of interest applicable on input tax credit (ITC) reversal, delayed payment of GST, and interest on the next tax liability. It clarifies that the rate of interest on wrongly availed and utilized ITC is 18% retroactively from July 2017. The rate of interest on delayed GST payment is also 18% retroactively from July 2017. For interest on the next tax liability, which is the amount paid in cash after adjusting ITC, the computation method has been clarified through retrospective amendments made in 2019, 2021, and 2022 Finance Acts. Understanding these interest rates and amendments is important for accurate GST compliance.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    of 2

    RATE OF INTEREST ON ITC REVERSAL / DELAYED PAYMENT

    OF TAX
    AUTHOR :ABHISHEK MALPANI

    https://taxguru.in/goods-and-service-tax/rate-interest-itc-reversal-delayed-payment-tax.html

    Introduction:

    There is often confusion among taxpayers regarding the rate of interest on ITC reversal and delayed payment of
    GST. It’s crucial to have a clear understanding of the applicable legal provisions to ensure compliance. In this
    article, we will discuss the rate of interest and relevant amendments related to the utilization of wrongly availed
    GST ITC, delayed payment of GST, and interest on the next tax liability.

    Rate of Interest on ITC reversal / delayed payment of tax

    There is a lot of confusion among many taxpayers regarding rate of interest on ITC reversal / delayed payment
    of GST and tax on next tax liability. For clearing the doubts, please refer below legal provision.

    Rate of Interest on utilization of wrongly availed GST ITC:

    Retrospective amendment w.e.f. 01.07.2017 has been made in sec 50 (3) of the CGST Act, 2017 by Finance Act,
    2022 to provide that interest is required to be paid on the wrongly availed ITC only when the same has been
    utilized.

    Vide Sec 111 of the Finance Act, 2022, sec 50(3) is substituted retrospectively w.e.f. 01.07.2017 vide
    notification 09/2022 – Central Tax dated 05.07.2022 to clarify that interest would be leviable only when ITC
    is wrongly availed and utilized and at the rate of 18% and not 24%.

    Rate of Interest on delayed payment of GST:

    As per notification 13/2017 – Central Tax dated 28.06.2017 which are amended retrospectively w.e.f.
    01.07.2017 vide Section 116 of Finance Act, 2022 respectively to notify the rate of interest on delayed payment
    of CGST, SGST, IGST & UTGST from 24% p.a. to 18% p.a. under section 50(3) of the CGST Act read with sec
    20 of IGST Act & sec 21 of the UTGST Act.
    Interest on next tax liability:

    A proviso was inserted in sec 50(1) of the CGST Act, vide Finance Act, 2019notified vide notification 63/2020-
    Central Tax dated 25.08.2020 w.e.f. 01.09.2020, to provide for computation of interest on next tax liability i.e.
    the amount to be paid in cash after adjustment of available ITC from gross tax liability, which was later
    substituted vide clause 112 of the Finance Act, 2021 dated 28.03.2021 notified vide notification 16/2021-
    Central Tax dated 01.06.2021 retrospectively w.e.f. 01.07.2017.

    Conclusion:

    Understanding the rate of interest on ITC reversal and delayed payment of GST is essential for taxpayers to
    comply with the applicable legal provisions. The retrospective amendments made in the Finance Acts of 2022,
    2019, and 2021 have clarified the interest rates and computation methods for different scenarios. By staying
    informed about these changes, taxpayers can ensure accurate compliance with GST regulations.

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