On 25th August 2020, the Central Board of Indirect Taxes & Customs (CBIC) released a clarification for the Notification No. 63/2020-Central Tax dated 25th August 2020 which said that the Central Government appointed 1st September 2020, as the date on which the provisions of section 100 of the Finance (No. 2) Act, 2019 (23 of 2019), shall come into force, which dealt with the topic of Interest on delayed payment of GST.

CBIC’s clarification statement said, “The Notification No. 63/2020 relates to interest on delayed payment of GST which has been issued prospectively due to certain technical limitations. However, it has assured that no recoveries shall be made for the past period as well by the Central and State tax administration in accordance with the decision taken in the 39th Meeting of GST Council. This will ensure full relief to the taxpayers as decided by the GST Council.”

This explanation was given by CBIC in response to an assortment of comments in the social media concerning the Notification dated 25th August 2020 regarding charging of interest on delayed payment of GST on net liability (the tax liability discharged in cash) w.e.f. 1st September 2020.

With Warm Regards,

CL Bureau.

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