The Ministry of Finance on 25.08.2020 notified about Section 100 of the Finance Act, 2019 coming into force from 01.09.2020.
As per Section 100 of the Finance Act, 2019, an additional provision is added to Section 50 of the Central Goods and Services Tax Act 2017 to clarify that the interest will be levied on a net basis.
Section 100 of the Finance Act, 2019 thus provides as follows, “Provided that interest on tax payable in respect of supplies made during a tax period and declared in the return for the said period furnished after the due date in accordance with provisions of Section 39, except where such return is furnished after commencement of any proceedings under Section 73 or Section 74 in respect of the said period, shall be levied on that portion of the tax that is paid by debiting electronic cash ledger”
In 2019, the government had amended Section 50 of the Central Goods and Services Tax Act 2017 to clarify that the interest will be levied on a net basis. This did not, however, explain whether the move would be made on a prospective or retrospective basis.
“In exercise of the powers conferred by sub-section (2) of section 1 of the Finance (No. 2) Act, 2019 (23 of 2019), the Central Government hereby appoints the 1st day of September 2020, as the date on which the provisions of section 100 of the Finance (No. 2) Act, 2019 (23 of 2019), shall come into force,” the notification read.
