In
39th GST Council's recommendation on Law and Procedure recommended
that Interest for delay in payment of GST should be on the net
cash tax liability retrospectively and w.e.f. 01.07.2017 .
The High Court of Jharkhand also held this ratio. To nuulify the recommendation and Madras High Court judgment Refex Industries Limited v. The Assistant Commissioner of CGST & Central Excise [Writ Petition No. 23360 & 23361 of 2019 dated January 6th, 2020](https://indiankanoon.org/doc/58818403/) has held that interest u/s 50 of CGST Act can be levied only on belated ‘cash’ component of tax and not on ‘ITC’ component.The newly inserted proviso to Section 50(1) of the CGST was held to be read as clarificatory and operative retrospectively.
Government though amended statute and declared
that amended proviso shall apply only prospectively from 1.9.2020.The
Government has notified such date from which newly inserted provisio to section
50(1) shall come in force.
Notification Central 63/2020.dt 25.08.2020.
