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2020 ] INTEREST ON DELAYED PAYMENT OF TAX UNDER SECTION 50(1) J63
Provided that the input tax credit on account of State tax shall be
utilised towards payment of Integrated tax only where the balance
of the input tax credit on account of Central tax is not available for
payment of Integrated tax
(d) the Union Territory tax shall first be utilised towards payment of
Union Territory tax and the amount remaining, if any, may be uti-
lised towards payment of Integrated tax;
Provided that the input tax credit on account of Union Territory tax
shall be utilized towards payment of Integrated tax only where the
balance of the input tax credit on account of Central tax is not avail-
able for payment of Integrated tax.
(e) the Central tax shall not be utilised towards payment of State tax or
Union Territory tax; and
(f) the State tax or Union Territory tax shall not be utilised towards
payment of Central tax.
Eligibility of Input Tax Credit
Section 16(1) : Every registered person shall, subject to such conditions
and restrictions as may be prescribed and in the manner specified in Section 49,
be entitled to take credit of input tax charged on any supply of goods or services
or both to him which are used or intended to be used in the course or furtherance
of his business and the said amount shall be credited to the electronic credit
ledger of such person.
The taxpayer is entitled to take credit of any input tax in respect of any
supply of goods or services or both subject to sub-section (2)(a) to (2)(d) and sub-
section (3) and (4) of Section 16 of the CGST Act, 2017.
Manner of computation of interest
Section 50(2) of the CGST Act, prescribes interest under sub-section (1) of
Section 50 shall be calculated, in such manner as may be notified. The due date of
payment of interest is from the day succeeding the day on which such tax due
was not paid and interest to be collected from the due date of payment of tax till
the date of tax was actually paid by the taxpayer. But the issue is the manner of
payment tax on gross amount or net amount of tax is the burning topic of the
day.
Decision of the GST Council Meeting
GST Council addressed the issue of manner of calculation of interest in
its meeting held on 22th December, 2018 and recommended the amendment of
Section 50(1) of the CGST Act to provide that interest should be charged only on
the 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. By which it is very much assured to the taxpayers that the
interest under Section 50(1) of the CGST Act, 2017 is to be levied only on the cash
payment made to clear the interest liability in case of delayed payment of tax.
Provision of Budget 2019-20
The Hon’ble Finance Minister in its Union Budget 2019-20 presented on
the 5th July, 2019 had proposed for the amendment in the Section 50(1) of the

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