There will be 18% interest from September 1 if there is a delay in paying GST liability
This year the industry had expressed concern over the delay in GST payment of Rs 46,000 crore. Interest was charged on total liability.
Due to the recession, there is a steady decline in the GST collection. In view of the decline in the GST collection, the government has made preparations to tighten the tax payers’ case late. Now the government has said that in the event of delay in GST payment, interest will be charged on net tax from September 1.
This year the industry had expressed concern over the delay in GST payment of Rs 46,000 crore. Interest was charged on total liability. After this, the GST Council had said in its March meeting that from July 1, 2017, interest will be charged on the delay in GST payment on the total tax liability and the law will be revised for this.
Business decision can be challenged in court
With the introduction of GST from crores of taxpayers, interest can be demanded for a period of more than three years. Therefore, businesses can once again approach the court, challenging the demand for interest. Subtracting the input tax credit from the gross GST liability indicates net GST liability. In such a situation, the calculation of interest on gross GST liability puts an additional burden on the traders. The government charges interest at the rate of 18 per cent for delayed GST payments.
