Reversal of ITC by petitioner through cash remittance is very well subjected to levy of interest: High Court

-

 

Reversal of ITC by petitioner through cash remittance is very well subjected to levy of interest: High Court


Though interest on reversal of ITC by way of adjustment in credit ledger is set aside by High Court.

Brief of Case

The challenge is to order dated 27.01.2021 levying interest under Section 50 of the CGST Act relating to both interest on cash remittances as well as remittances by way of adjustment of electronic credit register.

As far as the reversal by way of adjustment of credit ledger is concerned, it is covered by a decision in the case of Maansarovar Motors Private Limited V. The Assistant Commissioner. Both learned counsel concur on the position that in the light of the aforesaid decision, the levy to this extent is to be set aside and it is hence accordingly set aside.

As far as levy of interest on cash remittance is concerned, learned counsel for the petitioner only relies on the provisions of Section 42 of the Act which provides for a notice to be issued by the Assessing Authority in the case of mismatch of particulars at the end of the assessee, vis-a-vis, particulars/details furnished in the returns of the selling/purchasing dealer.

In this case, the provisions of Section 42 are not relevant, insofar as the impugned order itself records that the assessee has, on receipt of intimation of the wrongful claim of input tax credit (ITC), accepted the error in claim and has reversed ITC, both attributable to CGST and SGST through voluntary payment of tax in Form GST DRC-03.

The provisions of Section 42 can only be invoked in a situation where the mismatch is on account of the error in the database of the revenue or a mistake that has been occasioned at the end of the revenue. In a case where the claim of ITC by an assessee is erroneous, as in this case, then the question of Section 42 does not arise at all, since it is not the case of mismatch, one of wrongful claim of ITC.

As far as the levy of interest on belated cash remittance is concerned, it is compensatory and mandatory and the levy is upheld to this extent.


Comments

Post a Comment

Popular posts from this blog

MSME - Benifits

-
Image
As per the MSMED (Micro, Small and Medium Enterprises) ACT-2006 there are two classes of MSME which are as follows - Manufacturing Enterprises - These are the enterprises which are engaged in the production and manufacturing of goods and merchandise or help in value addition in the final product by employing plant and machinery. Service Enterprises- These is the enterprises engaged in rendering or providing services, the categorization of the enterprises are based on the investment in the plant and machinery. 2. Classification of Micro, Small and Medium Enterprises This classification has been amended by the finance minister Mrs. Nirmala Sitharaman in the latest stimulus of 3lakhs crores announced on 13th May, 2020. 3. Contribution in the Indian Economy It contributes significantly in terms of economic growth and GDP of the country. Some of the contributions made by the MSME sector in the economy are -: Contribution in country GDP- With more than 36.1 million units throughout the count
Read more

Procedure for Suspension of GST Registration

-
  GST Registration Suspension Suspension of GST Registration Suspension of registration is covered under Section 29 of the CGST Act, 2017 and the procedure for the same has been provided under Rule 21A of the  CGST Rules 2017.  Section 29 has been amended vide the CGST (Amendment) Act, 2018 (no. 31 of 2018) dated 29.08.2018 to allow suspension” of GST Registration w.e.f. 01.02.2019 and Rule 21A was inserted vide  Notification 03/2019- Central Tax dated 29.01.2019  with effect from 01.02.2019. Provisions for Cancellation or Suspension of GST Registration SECTION 29- 1. The heading of the section was amended from ‘Cancellation of Registration’ to ‘Cancellation or Suspension of Registration’. 2. A new proviso was inserted to section 29 (1) and the same is reproduced hereunder for ready reference –  ‘Provided that during the pendency of the proceedings relating to the cancellation of registration filed by the registered person, the registration may be suspended for such period and in such
Read more

TDS on Purchase & TCS on Sale explained with charts and Tally Entry

-
Image
  TDS on Purchase & TCS on Sale explained with charts and Tally Entry TDS on Purchase & TCS on Sale explained with charts and Tally Entry Understanding Compliance: From Seller Side 1 If Sale Receipts Above 50 lakh If Buyer is not liable to Deduct TDS u/s 194Q then TCS u/s 206C(1H) @ 0.1 % on Receipts Above 50 lakh If Buyer is liable to Deduct TDS under any other provision of this Act and has deducted such amount then No TCS u/s 206C(1H) If Buyer is liable to Deduct TDS under any other provision of this Act and has not deducted such amount then TCS u/s 206C(1H) @ 0.1 % on Receipts Above 50 lakh 2 If Sale Receipts upto 50 lakh No TCS u/s 206(1H) 1 TDS on Purchase & TCS on Sale explained with charts and Tally Entry From Buyer Side 1 If Purchase Value Above 50 lakh Deduction TDS u/s 194Q @ 0.1 % on Value Above 50 lakh 2 If Purchase Value upto 50 lakh No TDS u/s 194Q but TCS u/s 206(1H) may be applicable if aggregate payment (Including last year due) exceed 50 lakh during the ye
Read more