This Tax Alert summarizes a
Press Release dated 26 August 2020 issued by the Central Board of Indirect
Taxes and Customs (CBIC).
Notification no. 63/2020–Central
Tax dated 25 August 2020 was issued to provide that section 100 of the Finance
(No. 2) Act, 2019 shall come into force w.e.f. 1 September 20201.
Notification thus made the
proviso inserted in section 50(1) of the Central Goods and Services Tax Act,
2017, effective prospectively from 1 September 2020. As per the said proviso,
in case of delayed filing of return, interest shall be levied only on net tax
liability paid in cash, after adjusting input tax credit available with the
taxpayer.
The GST Council, in its 39th
meeting held on 14 March 2020, had decided that proviso will be given
retrospective effect from 1 July 20172.
Through the press release, CBIC
has clarified that the Notification dated 25 August 2020 gave effect to the
proviso prospectively due to certain technical limitations and have assured
that Revenue will not make recoveries for the past period in accordance with
the decision of GST Council.
The press release is likely to
provide much needed relief to taxpayers who delayed return filing and had paid
interest on net tax liability after adjusting input tax credit.
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