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”:

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:

Provided that the interest on tax payable in respect of supplies made during a tax period and declared in the return for the said period furnished after the due date in accordance with the provisions of section 39, except where such return is furnished after commencement of any proceedings under section 73 or section 74 in respect of the said period, shall be payable on that portion of the tax which is paid by debiting the electronic cash ledger. [substituted proviso from 01/06/2021: refer Note 2]

(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) Where the input tax credit has been wrongly availed and utilised, the registered person shall pay interest on such input tax credit wrongly availed and utilised, at such rate not exceeding twenty-four per cent as may be notified by the Government, on the recommendations of the Council, and the interest shall be calculated, in such manner as may be prescribed. [substituted sub-section (3) from 05/07/2022: refer Note 3]

Amendments History:

1. Proviso to sub-section (1) inserted vide section 100 of the Finance Act, 2019, followed with Notification 63/2020 on commencement date of 01/09/2020.

2. Proviso to sub-section (1) substituted w.r.e.f. 01/07/2017 vide Section 112 of the Finance Act 2021, followed with Notification 16/2021 on commencement date of 01/06/2021. Proviso to sub-section (1) before substitution:

Provided that the interest on tax payable in respect of supplies made during a tax period and declared in the return for the said period furnished after the due date in accordance with the provisions of section 39, except where such return is furnished after commencement of any proceedings under section 73 or section 74 in respect of the said period, shall be levied on that portion of the tax that is paid by debiting the electronic cash ledger. [proviso to sub-section (1) inserted from 01/09/2020: refer Note 1/ proviso to sub-section (1) substituted from 01/06/2021: refer Note 2]

3. Sub-section (3) to be substituted w.r.e.f. 01/07/2017 vide Section 111 of the Finance Act 2022, followed with Notification 9/2022 on commencement date of 05/07/2022. Sub-section (3) before substitution:

(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. [sub-section (3) substituted from 05/07/2022: refer Note 3]

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