Section 50 of CGST Act 2017: Interest on Delayed Payment of Tax

Provisions under Section 50 of the Central Goods and Services Tax (CGST) Act, 2017 relating to “Interest on Delayed Payment of Tax”, are as under:

Section 50 of CGST Act 2017: Interest on Delayed Payment of Tax (CHAPTER X – PAYMENT OF TAX)

(1) Every person who is liable to pay tax in accordance with the provisions of this Act or the rules made thereunder, but 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 such rate, not exceeding eighteen per cent., as may be notified by the Government on the recommendations of the Council. Interest on delayed payment of tax.

(2) The interest under sub-section (1) shall be calculated, in such manner as may be prescribed, from the day succeeding the day on which such tax was due to be paid.

(3) A taxable person who makes an undue or excess claim of input tax credit under sub-section (10) of section 42 or undue or excess reduction in output tax liability under sub-section (10) of section 43, shall pay interest on such undue or excess claim or on such undue or excess reduction, as the case may be, at such rate not exceeding twenty-four per cent., as may be notified by the Government on the recommendations of the Council.

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The Central Goods and Services Tax (CGST) Act, 2017 was notified by Govt. of India on 12 April, 2017 and CBIC has notified the commencement date for various Sections/ Provisions thereof from time to time. Subsequently, Govt. has notified the Central Goods and Services Tax (CGST) (Amendment) Act, 2018 on 30 Aug. 2018. Further, CBIC has separately notified the commencement date of provisions of various Sections of the CGST (Amendment) Act 2018 vide Notification No. 2/2019 Central Tax dt. 29 Jan. 2019, except for sections where the date of commencement is different from 1 Feb. 2019 and has specifically been mentioned in the CGST Amendment Act, 2018 itself.

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