Dear All,
The CBIC India had released a Press Release dated 26 August 2020 (‘the Press Release’) on its Twitter account (CBIC_India) whereby it was clarified that the date notified vide the Notification No. 63/2020 – Central Tax dated 25 August 2020 for levy of interest on Net Cash Tax liability is applicable prospectively (i.e., w.e.f. 1 September 2020) is only due to certain technical limitations. The Press Release had also assured that that no recoveries shall be made for the past period by the Central Administration and State Administration in accordance with the decision taken in the 39th GST Council Meeting.
In continuation to the same, the CBIC has released the following Administrative Instructions vide document No. F. No. CBEC – 20/01/08/2019 – GST dated 18 September 2020 (‘the Instructions’) in order to implement the recommendation of the 39th GST Council held on 14 March 2020 in its true spirt:
- For the period 1 July 2017 to 31 August 2020, field formations in jurisdictions may be instructed to recover interest only on net cash liability (i.e. the portion of the tax that has been paid by debiting the electronic cash ledger or is payable through cash ledger); and
- Wherever Show Cause Notices (‘SCNs’) have been issued on gross tax payable, the same may be kept in “Call Book” till the retrospective amendment in Section 50 of the Act is carried out.