GST UPDATE ON PAYMENT OF TAX DUES IN INSTALMENTS 125/2020-21

GST law has introduced one new concept of allowing payment of amount in instalments vide section 80 of the CGST Act, 2017. As the entire country is facing financial setback during this pandemic situation, this provision comes at rescue of the taxpayers. Recently, the Hon’ble Uttarakhand High Court in the case of SHREYA LIFE SCIENCES PRIVATE LTD. [WP NO. 746 OF 2020] had the occasion to consider payment of interest amount in instalments by the petitioner whose registration had been cancelled for not filing returns for continuous period of sixteen months. The petitioner pleaded that they have discharged the applicable tax but they request benefit of instalments for payment of interest amount. The Hon’ble High Court disposed off the petition by directing the petitioner to pay an upfront amount of Rs. 3 Lakhs and make representation to the Commissioner within four weeks for allowing payment of interest in instalments and for revocation of the cancellation order. The discretion to allow payment in instalments continued with the Commissioner. The analysis of the provisions of section 80 of CGST Act, 2017 is the subject matter of discussion in our present update.
According to section 80 of the CGST Act, 2017, onan application filed by a taxable person, the Commissioner may, for reasons tobe recorded in writing, extend the time for payment or allow payment of any amount dueunder this Act, other than the amount due as per the liability self-assessed in any return, bysuch person in monthly instalments not exceeding twenty four, subject to payment of interestunder section 50 and subject to such conditions and limitations as may be prescribed.
It is pertinent to mention that the benefit of section 80 is not available for amount due as per liability self-assessed in any return, thereby indicating that the amounts determined by the revenue authorities during the course of investigation or audit alone can be permitted for payment in instalments. Furthermore, as per Rule 158 of CGST Rules, 2017, the facility of instalment shall not be allowed in the following cases-

The person has already defaulted under the Act or IGST Act or UTGST Act or any SGST Act for which recovery proceeding are initiated.
The benefit to pay tax in instalments has been availed in the preceding financial year.
The amount payable is less than Rs. 25,000/-.

The benefit of instalment facility is not available for taxes reflected in return under self assessment indicates that this facility is to be granted in exceptional circumstances. However, consideration of instalment facility by Hon’ble High Court for payment of interest with respect to default in filing returns creates ambiguity as regard the restriction imposed in the section. Nonetheless, the situation of pandemic prevailing in the country is exceptional one and it is hoped that the instalment facility is being extended even in cases of dues on account of self assessment by making suitable amendment in the section.
This is solely for educational purpose.
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GST UPDATE ON PAYMENT OF TAX DUES IN INSTALMENTS 125/2020-21

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