The Central Board of Indirect Taxes and Customs (CBIC) released a notification with No. 63/2020–Central Tax on August 25, 2020. It notifies the interest on late GST payments would be applicable only on net cash tax liability after the deduction of the available input tax credits w.e.f. from 1st September 2020.
It further informed that the changes were made in Section 50 i.e inserting a proviso to Section 50(1), via section 100 of Finance (No. 2) Act, 2019 (23 of 2019) will come in effect from September 1, 2020.
“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 said.
Net cash tax liability is calculated after deducting the available input tax credits from gross tax liability.