Retrospective amendments in Section 50 – The INTEREST-ing saga continues!

Article by Neetu Sukhwani

With the passage of time, the lawmakers are realizing the lacunae in drafting the GST laws. The section 50 pertaining to levy of interest on delayed payment of tax has been a contentious provision since its inception. After several contrary decisions of various High Court, the GST Council in its 31st Meeting held on 22.12.2018 provided that interest should be charged only on the net tax liability of the taxpayer, after taking into account the admissible input tax credit, i.e. interest would be leviable only on the amount payable through the electronic cash ledger.

This amendment was notified by the government vide Notification No. 16/2021-Central Tax dated 01.06.2021. The story does not end here as the Budget 2022 comes with another retrospective amendment in section 50. In this article, the author discussed all previous amendments to Section 50 and proposed amendment introduced in Budget 2022.

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