GST Dept Notices Are Demanding Interest as Low as Rs2 on Late Payments

says a report from Business Standard . After directions from the Central Board of Indirect Taxes and Customs (CBIC) to recover goods and services tax (GST) interest, totalling Rs46,000 crore, field officials are busy sending notices for recoveries which, sometimes, are in single digits. One such client in equity information services has been asked to deposit Rs5, after rounding off the liability as interest, another Rs2,

No wonder, Bharatiya Janata Party (BJP) leader Dr Subramanian Swamy had described GST as the 'biggest madness' of 21st century. Delivering a talk on "India: An Economic Superpower by 2030", organised by the Pragna Bharati in Hyderabad, Dr Swamy says "This GST is so complicated that nobody understands which form to fill or where they want it to be uploaded. Somebody came from Barmer in Rajasthan. He said we don't have electricity, how can we upload. I said upload it on your head and go to the Prime Minister and tell him."

( Read: Centre to raise Rs 46Kcrore as interest on late filing of GST ) The government has discovered a new revenue stream to make up for the shortfall in GST collection and is looking to collect Rs46,000 crore as interest on late payment of tax.

In a letter, AK Pandey, special secretary and member CBITC, has told all principal chief commissioners and central tax commissioners that the law cast liability on the taxpayers to assess and pay the interest on delayed payment of tax.

Tax terrorism returns! GST officials will chase GSTR 3B late filers to recover 46k crore target Interest. Interest even on ITC portion. Draconian Law? pic.twitter.com/cHUA0CoZIk — GSTReckoner (@GSTReckoner) February 13, 2020

"Further, interest payable on such delayed payment of tax can be recovered under the provisions of section 79 of the CGST Act read with section 75 (12) which provides for various methods by which the proper officer shall proceed to recover any amount which is payable to the government," Mr Pandey said in his letter seen by IANS.

A senior state GST officer told the news agency that the letter had been received but expressed reservations over the way the amount of interest on late payment of tax has been arrived.

The notices sent to taxpayers read: "It has come to the notice of the department that you have failed to discharge interest liability on account of late filing of GSTR-3B returns. In this regard, I would like to draw your attention towards Sub-section (1) of Section 50 and Sub-section (12) of Section 75 of the CGST Act, 2017 which cast liability on the taxpayer to assess and pay the interest on delayed payment of tax."

Coming back to the newspaper report, it says, a company received notice for paying Rs0, which is the approximate figure for its interest liabilities.

Quoting from one such notice, the newspaper report says, “Records indicate that you have filed your GSTR 3B return for the period … after due dates in which you have not calculated and paid interest liability under section 50 of CGST Act 2017 … you are advised to deposit interest amount of Rs5 ... (else) appropriate legal action for recovery of interest due to delayed filing of return shall be initiated.”

As per the notice, the taxpayers are required to share details of interest payment on GST within seven days to the signing authority, failing to which recovery proceeding under section 79 of CGST Act can be initiated.

According to well-known chartered accountant (CA) Nikhil Vadia, it is very difficult to even rectify typo errors in GSTR 3B.

A typo error in GSTR 3B return may take months or years to adjust as per CBIC circular. In worst case you may never be able to correct it.



Why can't @askGSTech allow revision or amendment to original return filed. — Nikhil Vadia (@NikhilVadia) February 19, 2020

However, the issues is not limited to rectification in GSTR 3B. The GST department is sending notices to a taxpayers who had already filed all returns before the due date. Check the tweet by CA Ankit Gada...

even though I have filed all the returns (#GSTR3B )with in due date I got a notice from gst department for late payment interest what to do? @cbic_india @FinMinIndia @askGST_GoI @gstcornor #gstnfailed what kind of harrashment it is? — CA Ankit gada (@ankitgada89) February 14, 2020

Just look at the decimals used in the notices under #GST#DigitalIndia 📢📢 pic.twitter.com/iMDLzzmryf — Atul Modani (@atulmodani) February 20, 2020

Read: GST authorities summon firms with 12 key docs for scrutiny, industry wary ) Last month, the Central GST authorities started summoning businesses with a set of 12 key documents pertaining to FY17-18, the GST roll-out year, for closer scrutiny suggesting an aggressive approach against suspected tax evasion. Records called by the Central GST authorities include various GST returns (GSTRs), GST registration certificate, copies of annual report, income-tax returns, reports of cost, tax and internal audits, cash ledger and work orders, among others. Many tax experts pointed out that several records called by the department are already with them and, hence, such a demand is unreasonable. (

Businesses registered under GST (other than under the composition scheme) are required to file GSTR-1 for outward supplies for a month by the 11th day of the following month, and GSTR-3B, which is a summary return for sales and input tax credit (ITC), by the 20th.

Besides a late payment fee of Rs100 a day for Central GST and a matching amount for state GST, the law provides for a levy of 18% penal interest. The CBITC has clarified that taxpayers can pay part of their liabilities in cash and the rest through adjustments in input tax credit.

Central GST collection grew by 10.4% in the April-January period and has to grow by 21% in the last two months of the current fiscal year to meet the revised estimate which was scaled down by Rs1 trillion from the budget estimates of 2019-20 in the recent Budget for 2020-21.