Section 50 - Interest on delayed payment of tax

50. Interest on delayed payment of tax.[1]

(1) 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 eighteen per cent., as may be notified by the Government on the recommendations of the Council.

[2][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]

(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 notified by the Government, on the recommendations of the Council, and the interest shall be calculated, in such manner as may be prescribed]

 

[1] This Section was made effective by Notification No. 09/2017-Central Tax dt. 28-06-2017 wef 01-07-2017.

[2] Proviso substituted by Section 112 of The Finance Act 2021 dt. 28-03-2021 wef 01-07-2017 and made effective from 01-06-2021 by Notification No. 16/2021-Central Tax dt. 01-06-2021.

Earlier inserted by Section 100 of THE FINANCE (NO. 2) ACT, 2019 dt. 01-08-2019 and made effective from 01-09-2020 by Notification No. 63/2020-Central Tax dt. 25-08-2020 as follows

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.

 

 

[3] Substituted by section 111 of the THE FINANCE ACT, 2022 wef 01-07-2022 and made effective by Notification No. 09/2022-Central Tax dt. 05-07-2022.

(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 percent., as may be notified by the Government on the recommendations of the Council.

 

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