No interest recovery on credit reversal on date of completion of building

By | October 22, 2017
(Last Updated On: October 22, 2017)

Suggestions on GST Implementation Issues 28.09.2017 by ICAI

51. No interest recovery on the credit reversal on date of completion of building

Section 50 of the CGST Act provides that every person who is liable to pay tax in accordance with the provisions of this Act or the rules made there under, 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 18%, as may be notified by the Government on the recommendations of the Council.

There may be bona fide cases where the CENVAT credit was rightly availed at the time of
availment but some external event (like grant of Original Certificate for building) can result
in GST not being applicable. In such cases, demanding the interest recovery on the GST
amount would be inequitable.

It is suggested to insert a proviso in the section as under: –
“Provided that no interest would be payable in case of reversal of credit due to grant of
permission or certificate in respect of building referred in Schedule II para 5(b)“.


Read Complete Suggestions on GST Implementation Issues 28.09.2017 by ICAI Indirect Tax Committee in PDF

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About CA Satbir Singh

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