GST Department Initiates Interest Recovery Notices!
The GST Department has started issuing notices for the recovery of interest on delayed declaration of outward supplies.
Example:
Invoice Date: 01/08/2021
Declared in GSTR’1 of Jan 2022 & GSTR-3B of Jan 2022
While filing GSTR-3B, the system automatically calculates interest only on delayed payment of tax in previous 3B returns. However, if an outward supply for a particular tax period is declared in a subsequent period, the system does not compute interest on such delay.
- What’s New? The department’s internal software has now computed interest on such delayed declarations, and notices are being issued for its recovery.
- Interest is payable even if sufficient ITC was available in the credit ledger during the period of supply. (Proviso to Section 50(1) provides relief only when supplies are declared in the same tax period.)
- This interest is categorized as ‘Self-Assessed Interest’, hence Amnesty benefits cannot be availed on it.
- Also It is not barred by the time limitations under Sections 73/74 as this int. is governed by S.75(12)
- As of now, notices have been issued only in cases where the interest exceeds ₹50,000. However, this amount can go up to several lakhs, even for MSMEs—especially for dealers with improper return filings!!
