63/2020 – Interest on delayed payment shall be charged only on the Net GST Liability

The Ministry of Finance on 25-Aug-2020 released a notification in the official Gazette

Notification number 63/2020 – Central Tax dated 25th August 2020

Interest on gst on net liability

The Interpretations is as below:

  • Changes were made in Section 50 by inserting a proviso to Section 50(1), via Section 100 of Finance (No.2) Act, 2019
  • Section 50 is related to payment of Interest on GST
  • Prior to this notification interest on delayed payment was charged on the Gross GST Liability.
  • But now interest on delayed payment shall be charged only on the Net GST Liability.
  • Interest shall be collected on on the payment made in cash
  • The above provision shall come into force from 01-Sep-2020
  • This provision is not applicable (as was expected) with retrospective effect i.e 01-Jul-2017
  • This means Interest on Tax liability due prior to 01-Sep-2020 shall be charged on the Gross GST liability due
  • The above provision is not applicable where a return is furnished after the commencement of any proceeding under section 73 or section 74 in respect of the said period

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