demanded interest on delayed payment
|
Case Title |
Sumilon Polyster Limited vs Union Bank of India. |
|
Court |
Gujarat High Court |
|
Honorable Judges |
Justice N.V.Anjaria & Justice Bhargav D.Karia |
|
Citation |
2022 (7) GSTPanacea 192 HC Gujarat C/SCA/18198/2019 |
|
Judgement Date |
27-July-2022 |
|
Council for Petitioner |
Avinash Poddar |
|
Council for Respondent |
Trupesh Kathiriya Kruitk Parikh Nikunt K Raval |
The Gujarat High Court bench of Justice N.V.Anjaria & Justice Bhargav D.Karia has held that charging interest on the net GST liability instead of gross GST liability.
FACTS OF THE CASE
The petitioners have challenged the action of the respondents-authorities levying interest on the delayed payment of tax as per section 50 of the CGST Act on the gross tax liability of the petitioners instead of net liability.
Respondent demanded interest on delayed payment of tax under the provisions of CGST Act and GGST Act by calculating the interest on the gross GST liability instead of net GST liability as per section 50(1) of the CGST Act.
As per the decision taken in the 31st GST Council Meeting held on 22.12.2018 at New Delhi, the interest shall be charged only on the net liability of the tax payer after taking into account the admissible credit i.e. the amount payable to electronic cash ledger.
demanded interest on delayed payment
COURT HELD
Considering the facts as recorded, held that In view of the Notification No. 16 of 2021, the proviso which is substituted vide sub-section 50(1) of the CGST Act w.e.f. 1st day of July, 2017.
Would take care of the issue raised in this group of petitions of charging interest on the net GST liability instead of gross GST liability.
demanded interest on delayed payment
ANALYSIS OF THE JUDGEMENT
In view of the amendment of section 50(1) of the CGST Act by substituting the proviso w.e.f. 1st day of July,2017 as per section 112 of the Finance Act, 2021 which has been made effective vide Notification No. 16 of 2021 dated 01.06.2021. Respondents are directed to give effect to the aforesaid amendment within a period of twelve weeks from the date of receipt of this order.
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