Section 50 of the Central Goods and Services Tax Act, 2017 provides for interest liability in cases where the taxpayer either delays the payment of tax or utilizes ineligible Input Tax Credit (ITC).

🔷 Interest for Late Payment of Self-Assessed Tax

🔸 Applicability:

• When a registered person fails to pay the tax due under GSTR-3B within the prescribed due date.
• Applies to self-assessed tax only (i.e., tax declared in GSTR-3B).

🔸 Key Provisions:

• Interest is payable at the rate of 18% per annum.
• Proviso (inserted via Finance Act 2021): Interest shall be levied only on the portion of the tax paid in cash (net tax liability) and not on ITC utilization.

🔸 Period of Interest:

From the due date of filing GSTR-3B to the actual date of payment.

✅ Example:

🔷 Interest as Prescribed

This is an enabling provision giving the Central Government authority to prescribe the method of interest calculation – which is done through Rule 88B (explained in Part B).

🔷 Interest on Wrong Availment and Utilization of ITC

🔸 Applicability:

• When a person wrongly avails and utilizes Input Tax Credit.

🔸 Conditions:

• Both availing and utilization must occur for interest to be charged.
• If ITC is availed but not utilized, no interest is payable as per the Supreme Court ruling in Union of India v. VKC Footsteps and CBIC circulars.

🔸 Interest Rate:

• 24% per annum

🔸 Period:

From the date of utilization (i.e., when ITC is used to discharge tax liability) to the date of reversal/payment.

✅ Example:

🔷 Summary of Section 50 Provisions: