Interest provisions under GST

Coming to GST, unlike many others, I firmly believe that Implementation of GST in India shall boost economic growth and overall development of industries. It would also be an engine for generation of employment in India as simplicity and transparency under the GST law would definitely promote and motivate investors to undertake “Make in India” initiative, the prime mission set by our Honorable Prime Minister, Shri Narendra Modiji.

Interest provisions under GST

Notification No. 13/2017 – Central Tax dated 28th June 2017

  • Interest on delayed payment of GST – 18% p.a.
  • Interest on excess ITC claimed / excess reduction in output tax liability – 24% p.a.
  • Interest on withheld refund – 6% p.a.
  • Interest on delayed refund (beyond 60 days) – 6% p.a.
  • Interest on delayed refund (arising from order of authority/ court) – 9% p.a.

Interest on Non Payment of GST

Section 20 of IGST act 2017 read with sub-Section(1) of Section 50 of the Central Goods and Services Tax Act, 2017 Every person who is liable to pay tax in accordance with the provisions of this Act or the rules made thereunder, but fails to pay the tax or any part thereof to the Government within the period prescribed, shall for the period for which the tax or any part thereof remains unpaid, pay, on his own, interest at such rate, not exceeding eighteen per cent., as may be notified by the Government on the recommendations of the Council 18%
Section 20 of IGST act 2017 read with sub-Section(3) of Section 50 of the Central Goods and Services Tax Act, 2017 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, as the case may be, at such rate not exceeding twenty-four per cent., as may be notified by the Government on the recommendations of the Council 24%
Section 20 IGST act 2017 read with sub-Section(12) of Section54 of the Central Goods and Services Tax Act, 2017 Where a refund is withheld under sub-section (11), the taxable person shall, notwithstanding anything contained in section 56, be entitled to interest at such rate not exceeding six per cent. as may be notified on the recommendations of the Council, if as a result of the appeal or further proceedings he becomes entitled to refund. 6%
Section20 IGST act 2017 read with Section56 of the Central Goods and Services Tax Act, 2017 If any tax ordered to be refunded under sub-section (5) of section 54 to any applicant is not refunded within sixty days from the date of receipt of application under subsection (1) of that section, interest at such rate not exceeding six per cent. as may be specified in the notification issued by the Government on the recommendations of the Council shall be payable in respect of such refund from the date immediately after the expiry of sixty days from the date of receipt of application under the said subsection till the date of refund of such tax: 6%
Section20 IGST act 2017 read with proviso to Section 56 of the Central Goods and Services Tax Act, 2017 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. as may be notified by the Government on the recommendations of the Council shall be payable in respect of such refund from the date immediately after the expiry of sixty days from the date of receipt of application till the date of refund 9% 

If you have any query regarding GST, then please cobatct us via Contact Page