Page 13 - Ch9_POT & TDS-TCS

CCP 09.10.19.00

MNI Ltd. provides following details for the month of March 20XX:
(1) While filling GST return of March 20XX on 20-04-20XX (within the prescribed due date), they came
to know that one bill of January 20XX consisting tax amount of ` 50,000 was not considered while
filling return for the month of January 20XX (Return was filed on 20-02-20XX, within the
prescribed due date).

(2) MNI Ltd. has paid the above shortfall of ` 50,000 of January 20XX, through GSTR-3B for the month
of March 20XX (payment through cash ledger was ` 30,000 and payment through credit ledger was
` 20,000).
(3) MNI Ltd. got a notice regarding interest payment u/s 50 of the CGST Act, 2017. MNI Ltd. assumed

that they paid self-assessed tax and both returns were also filed timely so they were not liable for
payment of interest.
They seek your opinion regarding whether,
(i) They are liable to pay interest u/s 50 of the CGST Act.

(ii) If they had filed return of January 20XX on 20-04-20XX (Self assessed tax also paid on 20-04-
20XX of ` 50,000 (payment through cash ledger was ` 30,000 and payment through credit ledger was `
20,000), then also they are liable to pay interest u/s 50 of the CGST Act. [CA IPC July 21 Exam]
Answer:

Legal provision:-
Ü As per section 50 of the CGST Act, 2017, Interest is payable on delayed payment of tax at the rate 18% from
the day succeeding the due date of payment till the date of payment.
Ü Further, the interest on tax payable in respect of supplies made during a tax period and declared in the
return for the said period furnished after the due date is payable on the net tax liability paid through

electronic cash ledger.
Discussion and conclusion:-

i Ü In the given case, MNI Ltd. has defaulted in making the payment of ` 50,000 in the return of
January 20XX.
Ü Therefore, it will be liable to pay interest @ 18% p.a. from 21.02.20XX till the date of payment.
Ü Further, since the return for the month of January, 20XX has been filed on the due date, MNI Ltd.
will be liable to pay interest on the gross tax liability i.e., ₹ 50,000 and not on net tax liability
paid in cash.

ii If MNI Ltd. had filed the return for the month of January, 20XX on 20.04.20XX, i.e. after the
prescribed due date and the tax of ` 50,000 is also paid on 20.04.20XX, interest will be payable on
net tax liability paid through electronic cash ledger i.e., 30,000.₹

CCP 09.10.20.00
Mr. A file the return has the month of April, May , June, July, Aug. He has furnished the following
details refereeing the details. Determine the date from when such interest is applicable.
Month Opening balance Eligible ITC Total ITC Output Due date Actual date

in electronic ITC (B) wrongly (D) = liability of Filing the of filing
credit ledger [A] availed (C) (A+B+C) (E) return Return
April - 7,00,000 50,000 7,50,000 7,00,000 20 May 20 May
May 50,000 5,00,000 - 5,50,000 5,00,000 20 June 20 June

CA VISHAL BHATTAD 09850850800 www.vsmartacademy.com V’Smart Academy 149