Cbic vide notification no. 63/2020 – central tax dated august 25, 2020, has notified proviso to sect

CBIC vide Notification No. 63/2020 – Central Tax dated August 25, 2020, has notified proviso to section 50(1) of the CGST Act, 2017, with effect from September 01, 2020. 

Interest in GST to be levied on “Net Tax liability”,

Section100: In section 50 of the Central Goods and Services Tax Act, in sub-section (1), the following proviso shall be inserted, namely:––

“Provided that 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 in accordance with the provisions of section 39, except where such return is furnished after the commencement of any proceedings under section 73 or section 74 in respect of the said period, shall be levied on that portion of the tax that is paid by debiting the electronic cash ledger.”.

The notification can be read as:

THE GAZETTE OF INDIA : EXTRAORDINARY [PART II—SEC. 3(i)]
MINISTRY OF FINANCE
(Department of Revenue)
(Central Board of Indirect Taxes and Customs)
NOTIFICATION
New Delhi, the 25th August, 2020
No. 63/2020–Central Tax

G.S.R. 527(E).—In exercise of the powers conferred by sub-section (2) of section 1 of the Finance (No. 2)
Act, 2019 (23 of 2019), the Central Government hereby appoints the 1st day of September, 2020, as the date on which
the provisions of section 100 of the Finance (No. 2) Act, 2019 (23 of 2019), shall come into force.

[F. No. 20/06/09/2019-GST]
PRAMOD KUMAR, Director

Clarification of notification 63/2020 by CBIC on 26th August 2020

The Central Board of Indirect Taxes and Customs (CBIC) clarified notification 63/2020 Dated 25th August on 26th August in a press release that the notification relating to interest on delayed payment of GST has been issued prospectively due to certain technical limitations.

“However, it has assured that no recoveries shall be made for the past period as well by the Central and State tax administration in accordance with the decision taken in the 39th Meeting of GST Council. This will ensure full relief to the taxpayers as decided by the GST Council,”.

CBIC explanation came in response to an assortment of comments in the social media with respect to Notifictaion dated 25th August 2020 regarding charging of interest on delayed payment of GST on net cash liability w.e.f 1st September 2020.