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Start recovering Rs 46K-Cr unpaid interest on delayed GST payments

New Delhi: The Central Board of Indirect Taxes and Customs (CBIC) has directed principal chief commissioners and chief commissioners to begin recovery of nearly Rs 46,000 crore of unpaid interest on delayed goods and services tax (GST) payments. The direction which requires officials to report on the recovered amount within a week starting February 10, comes at a time when the GST collection target for February and March has been revised to Rs 1.15 lakh crore. “Interest payable on such delayed payment of tax can be recovered under the provisions of section 79 of the CGST Act read with section 75(12) which provides for various methods by which the proper officer shall proceed to recover any amount which is payable to the government,” CBIC member AK Pandey has said in the letter dated February 10. ET has seen a copy of the letter.

The letter has directed the field offices to, “initiate the process of recovery of such unpaid interest as per the provision of section 79 read with section 75 (12) of the Central GST Act.” It has also clarified that interest is required to be paid on the total amount of tax liability. A senior official said that while the period of unpaid interest begins from the time GST was implemented and goes on till date, the direction to recover that amount was well within the legal ambit since the liability for paying the interest on delayed tax payments was on the taxpayers.

A list of people or entities that have not paid the interest while filing their GSTR 3B forms late has been shared by the Principal Additional Director General (Systems). The department wing had also found that Rs 45,996 crore is the unpaid interest amount.

Tax experts said that the move was likely to trigger litigations with taxpayers challenging the demands since the government had at the time of migration to the new indirect tax regime waived off interest and penalties for filing their tax returns. “There will recovery proceedings for this leading to widespread tax litigations and inconvenience to taxpayers,” said Rajat Mohan, senior partner at AMRG Associates.

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