Interest on Net Cash: GST Council recommends to Amend CGST Rules w.e.f 1st July 2017

Interest on Net Cash - GST Council - CGST Rules - Taxscan

The GST Council meeting conducted after a long gap of seven months has decided to give retrospective amendment in section 50 of the CGST Act with effect from 01.07.2017, providing for payment of interest on a net cash basis. The Central Board of Indirect Taxes (CBIC) will issue a notification in this regard at the earliest, PIB reported.

GST Council further recommended amendments in certain provisions of the Act so as to make the present system of GSTR-1/3B return filing the default return filing system in GST.

As per section 50 of the Central Goods and Services Tax Act, interest shall be levied on delayed remittance of the output GST liability. Section 100 of the Finance (No. 2) Act, 2019 inserted a Proviso to Section 50 which stated that interest is leviable only on that portion of output liability which is discharged by way of cash. The Council decided to give retrospective effect to this amended provision from 1st July 2017, i.e., from the date of implementation of the GST law.

The Council also provided some relief to the small businesses by waiving of late fee on delayed filing of GST returns. Currently, the businesses with up to Rs.5 crore in sales will have no interest liability for late payments for March and April, for 15 days after the due date. For the following fortnight, they will have to pay 9% annual interest, before the usual 18% rate kicks in. Small businesses filing quarterly or monthly returns will also get the same benefits for the two months.

Support our journalism by subscribing to Taxscan AdFree. We welcome your comments at info@taxscan.in

Related Stories