GST UPDATE ON PAYMENT OF INTEREST IN INSTALLMENT

The facility of payment of dues of government in instalments is a new feature of GST law as provided in section 80 of the CGST Act, 2017. In this update we will discuss about recent Gauhati HC decision in case of M/S AICH BROTHERS VS UNION OF INDIA [W.P. NO. 3222/2021] allowing the facility to pay interest in instalments to the petitioner. As per Sec 80 of CGST Act, 2017 “On an application filed by a taxable person, the Commissioner may, for reasons to be recorded in writing, extend the time for payment or allow payment of any amount due under this Act, other than the amount due as per the liability self-assessed in any return, by such person in monthly instalments not exceeding twenty four, subject to payment of interest under section 50 and subject to such conditions and limitations as may be prescribed” In this case petitioner filed petition aggrieved by the cancellation of GST registration by department due to non-payment of interest as per the order of the department. The petitioner has not filed the GSTR 3B for the period of Oct 18 to April 20 and there was an outstanding interest liability of Rs 73 lakhs. The petitioner contented that they have paid the tax amount as shown on portal but the department has not restored the registration due to which they are facing hardship in recovering the due amount from the parties. Consequently, the petitioner requested to allow them to pay the outstanding interest amount in instalments. The Hon’ble High Court of Gauhati ruled that in this kind of situation, registration can be restored by the department only after the payment of due amount. Court admitted the hardship faced by assessee due to non recovery of payment from the parties and directed the assessee to approach the department with the specific request to pay the due amount of interest in instalment and also direct the department to restore the registration. Similar view was taken by Kerala HC in case of PAZHAYIDOM FOOD VENTURES PVT. LTD V. SUPERINTENDENT COMMERCIAL TAXES where HC directed the department to accept the belated returns and to allow the assessee to discharge the liability in monthly instalment. In yet another case, MALAYALAM MOTORS PVT. LTD. V. THE ASSISTANT STATE TAX OFFICER, the Hon’ble Kerala HC directed that assessee who has accepted to pay tax along with interest shall be permitted to discharge liability in instalments. In nutshell, court is taking liberal views so as to facilitate the assessee to pay amount in instalments in cases where assessee have accepted to pay the entire tax along with interest and penalty as directed by the revenue department. Everyone is struggling in this pandemic era and businesses are shut down due to lockdown. As such, the facility should be given to businessman to run his business smoothly. The CBIC should also accept the demand of businessman to pay the tax and interest in instalments. They should prescribe the procedure for the same. This is solely for educational purpose. You can reach us at new.capradeepjain.com , at our facebook page on https://www.facebook.com/GSTTODAYBYPRADEEPJAIN/ as well as follow us on twitter at https://www.twitter.com/@capradeepjain21 and follow us on linkedin at https://www.linkedin.com/in/ca-pradeep-jain-b6a31a16/

Comments

GST UPDATE ON PAYMENT OF INTEREST IN INSTALLMENT

Post a Comment

Query