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Question ID : 35848

Interest payable before or after set-off ITC?

An assessee has filed GSTR-3B returns of and from September 2017 in September 2018 wherein ITC of GST availed and set-off against output GST charging interest @ 18% p.a. for 1 year of delay. Interest was calculated on the net tax payable (after set-off ITC) however, department has sent an intimation that interest has not been discharged as per Section 50 of the CGST Act on the tax paid. As per Section 50 of the CGST Act interest at the rate of 18% is to be paid on the tax paid belatedly. Tax is paid only when the same is set off in the ITC ledger /Cash ledger at the time of filing the GSTR 3B. You are requested to calculate the interest payable on the delayed payments made by you and pay the interest. Please clarify if this stand taken by the department is correct or defendable? At what level?

Posted by CA. RAJESH KUMAR C on Oct 17, 2018

Filed Under GST