Interest Payment in GST

[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II,
SECTION 3, SUB-SECTION (i)]
Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise and Customs

Notification No. 13/2017 – Central Tax

New Delhi, the 28th June, 2017
7 Ashadha, 1939 Saka

G.S.R. …..(E).—In exercise of the powers conferred by sub-sections (1) and (3) of section 50, sub-section (12) of section 54 and section 56 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on the recommendations of the Council, hereby fixes the rate of interest per annum, for the purposes of the sections as specified in column (2) of the
Table below, as mentioned in the corresponding entry in column (3) of the said Table

This notification shall come into force from the 1st day of July, 2017.

[F. No.349/72/2017-GST]
(Dr. Sreeparvathy S.L.)
Under Secretary to the Government of India

Interest payable on delay payment of Tax: According the section 50(1) of CGST Act provided that where every person liable to discharge his output tax but he 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 18%. Wheras, as per sub-section (2) of section 50 of CGST Act, the interest under section 50 (1) shall be calculated from the day succeeding the day on which such tax was due to be paid.

Interest payable on excess claim of ITC or on excess reduction of output tax liability by recipient or supplier respectively in his return: According to Section 50 (3) of CGET Act, a taxable person who makes an undue or excess claim of input tax credit under sub-section (10) of sec 42 or undue or excess reduction in output tax liability under sub-section (10) of sec 43, shall pay interest on such undue or excess claim or on such undue or excess reduction, as the case may be, at 24% on the amount so added.

Interest payable on Appeal Refund: Section 54 (12) read with Section 54 (11) which postulate that Where an order giving rise to a refund is the subject matter of an appeal or further proceedings or where any other proceedings under this Act is pending and the Commissioner is of the opinion that grant of such refund is likely to adversely affect the revenue in the said appeal or other proceedings on account of malfeasance or fraud committed, he may, after giving the taxable person an opportunity of being heard, withhold the refund till such time as he may determine and the taxable person shall, notwithstanding anything contained in section 56, be entitled to interest at such rate not exceeding six percent.

Interest Payable on delay payment of refund in respect of applicant refund:According to section 56, 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 sub-section (1) of that section, interest shall be payable at 6% in respect of such refund from the date immediately after the expiry of sixty days from the date of receipt of the application under the said sub-section till the date of refund of such tax.

Delay payment of Interest on refund Order passed by Appellate Authority or Appellate Tribunal or court: As per the proviso of Section 56, 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, then interest shall be payable at 9% 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.