The GST Council’s 47th meeting was held in Chandigarh on June 28th and 29th, 2022 under the chairmanship of the Union Finance & Corporate Affairs Minister Smt. Nirmala Sitharaman. The GST Council has inter-alia made recommended to notify amendment in Section 50(3) of the Central Goods and Services Tax Act, 2017 (“the CGST Act”) of the Finance Act, 2022 to be notified by Central Government at the earliest:
Effect: Retrospective amendment in Section 50(3) of CGST Act, with effect from July 01, 2017, to provide that interest will be payable on the wrongly availed ITC only when the same is utilized.
The rules providing for the manner of calculation of interest under Section 50 of CGST Act have also been recommended for more clarity. This will remove ambiguities regarding manner of calculation of interest and will also provide for transfer of balance in CGST and IGST cash ledgers between distinct persons, thereby improving liquidity and cash flows of such taxpayers.
Amended Section 50(3) of the CGST Act reads as under:
“50. Interest on delayed payment of tax.
(3) Where the input tax credit has been wrongly availed and utilised, the registered person shall pay interest on such input tax credit wrongly availed and utilised, at such rate not exceeding twenty-four per cent. as may be notified by the Government, on the recommendations of the Council, and the interest shall be calculated, in such manner as may be prescribed.”
The Press release can be accessed at: https://www.pib.gov.in/PressReleasePage.aspx?PRID=1838020
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