The Central Goods and Services Tax Act, 2017
Chapter-X Payment of Tax
Section 50: Interest on delayed payment of tax.
50. (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 notifiedn1 by the Government on the recommendations of the Council.
1[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 2[or section 74A] in respect of the said period, shall be payable on that portion of the tax which is paid by debiting the electronic cash ledger.]
(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[(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 notifiedn1 by the Government, on the recommendations of the Council, and the interest shall be calculated, in such manner as may be prescribed.]
References
Enforcement:
Enforced w.e.f. July 01, 2017 [Notification No. G.S.R. 658(E) dated 28.06.2017].
Amendments:
1. Substituted by Finance Act, 2021 and shall be deemed to have been substituted w.e.f. 01.07.2017 [the Finance Act, 2021 enforced w.e.f. 01.06.2021 vide Notification No. 16/2021–Central Tax dated 01.06.2021], for the proviso which was inserted by Finance (No. 2) Act, 2019, w.e.f. 01.09.2020 [vide Notification No. 63/2020–Central Tax dated 25.08.2020]:
“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.”
2. Inserted by Finance (No. 2) Act, 2024, w.e.f. 01.11.2024 [Notification No. 17/2024–Central Tax dated 27.09.2024].
3. Substituted by Finance Act, 2022 and shall be deemed to have been substituted w.e.f. 01.07.2017 [the Finance Act, 2022 enforced w.e.f. 05.07.2022 vide Notification No. 09/2022–Central Tax dated 05.07.2022], for the sub-section:
“(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.”.
Notifications:
n1. Rate of Interest under Section 50, 54 and 56 of CGST Act – CGST Notification No. 13/2017 – Central Tax dated 28.06.2017 and for IGST Act – Notification No. 06/2017 – Integrated Tax dated 28.06.2017.
Circulars:
c1. For cases related to advanced received, goods returned, TDS, refund etc., refer Circular No. 137/07/2020-GST dated 13.04.2020.
c2. Categories of refunds where re-credit can be done using FORM GST PMT-03A and Procedure for re-credit of amount in electronic credit ledger. [Circular No. 174/06/2022-GST dated 06.07.2022]
c3. Clarification on charging of interest under section 50(3) of the CGST Act, 2017, in cases of wrong availment of IGST credit and reversal thereof. [Circular No. 192/04/2023-GST dated 17.07.2023]