Under Section 50 CGST Act 2017, INTEREST is payable on:
Answer & Solution
Correct answer: C.
1. Section 50(1) CGST Act 2017: every person who fails to pay tax or any part thereof within the period prescribed shall pay INTEREST at such rate not exceeding 18% per annum (currently 18%) for the period for which the tax remains unpaid.
2. Section 50(3): wrongfully availed or utilised input tax credit shall be reversed with INTEREST at 24% per annum.
3. CALCULATION: simple interest from the day immediately succeeding the due date till the date of payment.
4. Section 50 was amended by Finance Act 2021 to clarify interest on NET CASH LIABILITY (not gross tax) — though this has been subject to litigation.
5. Hence option B is correct.
_Source: CS Executive Paper 4 Tax Laws (ICSI BoS) + Income Tax Act 1961 + CGST Act 2017 — CGST Act 2017, Section 50_
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