Retrospective amendment in Section 50 of the Central Goods and Services Tax Act, 2017 (“CGST Act”) with effect from July 01, 2017, providing for payment of interest on net cash basis, to be notified at the earliest.
Relevant provision:
Proviso to Section 50 of the CGST Act as substituted vide Clause No. 112 of the Finance Act, 2021 w.e.f. July 01, 2017 but not yet notified:
“50. Interest on delayed payment of tax.
(1) Every person who is liable to pay tax in accordance with the provisions of this Act or the rules made thereunder, but fails to pay the tax or any part thereof to the Government within the period prescribed, shall for the period for which the tax or any part thereof remains unpaid, pay, on his own, interest at such rate, not exceeding eighteen per cent., as may be notified by the Government on the recommendations of the Council.
Provided that the interest on tax payable in respect of supplies made during a tax period and declared in the return for the said period furnished after the due date in accordance with the provisions of section 39, except where such return is furnished after commencement of any proceedings under section 73 or section 74 in respect of the said period, shall be payable on that portion of the tax which is paid by debiting the electronic cash ledger.”
The Press Release can be accessed at: https://www.pib.gov.in/PressReleasePage.aspx?PRID=1722578