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Belated payment of GST against RCM, Goods and Services Tax - GST

Issue Id: - 117271
Dated: 9-6-2021
By:- phaniraju konidena
Belated payment of GST against RCM

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Dear Experts,

During the FY 2017-18 (Aug, Nov and Dec) our liability against RCM, say total ₹ 100/- has been deposited and shown in our Electronic Cash Ledger. Unfortunately, we have not debited/declared the liability while filing the GSTR-3B for the respective months. Finally, we have found the mistake on our own and paid the same on 15.02.2020 at the time of filing GSTR-9C through by DRC-03 and not paid the ‘interest’ under Sec.50 till today. But we have availed and utilized the ITC as we have assumed that the liability has already been debited to the account of Govt. That means, we have utilized the ITC before making the payment against Rule 36(b) of CGST Rules. Our query is that –

Can the department demand us to reverse the ITC on the reason of availing before payment of tax to the govt.?

Can the department impose equal penalty under Sec.74 on the reason of irregular availment?

If we will pay the interest (as it compensatory in character), can the belayed payment of tax be regularized; it means that the belated payment be treated as in time payment?

Please clarify.

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Posts / Replies

Showing Replies 1 to 4 of 4 Records

1 Dated: 10-6-2021
By:- YAGAY andSUN

In our view, it cannot be regularized however, paying of statutory interest will certainly bring some relief to you.


2 Dated: 10-6-2021
By:- KASTURI SETHI

Q. Can the department demand us to reverse the ITC on the reason of availing before payment of tax to the govt.?

Reply : Yes.

Q. Can the department impose equal penalty under Sec.74 on the reason of irregular availment ?

Ans. Yes.

Regarding third query, I agree with M/s.Yagay and Sun, Sirs.


3 Dated: 11-6-2021
By:- Shilpi Jain

Going by the strict interpretation of the law, I agree with the experts. However we have seen in the case of TRAN 1 irregularities that the courts have been liberal to stay that technical glitches cannot lead to denying benefit.

In the present case if you can show that the amount of tax liability was indeed paid in the cash ledger but was missed to be adjusted due to the reason that the law was new and the error has happened, there could be a possibility to defend. Though this would be worth only if amount of credit is significant considering the cost of litigation. Hence u can take a call and pay the Interest in case of department intervention.


4 Dated: 11-6-2021
By:- phaniraju konidena

Thanks for all


1

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