18% Interest for Non-payment of Tax, Excess Claim of IPT would attract 24%; Govt Notifies rates of Interest under GST

The Central Government today notified the rates of interest to be paid under the Central Goods and Services Tax (CGST) Act.

As per the present notification, persons who fail to pat tax under the CGST Act would be liable to pay interest at the rate of 18%.

Further, a taxable person who makes an undue or excess claim of input tax credit under sub-section (10) of section 42 or undue or excess reduction in output tax liability under sub-section (10) of section 43, shall pay interest on such undue or excess claim or on such undue or excess reduction shall be liable to pay 24% interest.

In case of delay in considering the refund application for the excess paid tax, within the time limit prescribed under the Act, the Government should pay 6% interest to the tax payer.

6% interest is payable by the Department if the refund allowed to the tax payer within sixty days from the receipt of application for refund.

It also provided that where any claim of refund arises from an order passed by an adjudicating authority or Appellate Authority or Appellate Tribunal or court which has attained finality and the same is not refunded within sixty days from the date of receipt of application filed consequent to such order, interest at such rate not exceeding nine per cent.

Read the full text of the Notification below