Notification No.: 63/2020 – Central Tax
Date of Notification: 25th August 2020
Relevant Sections and Rules:
- Finance (No. 2) Act, 2019:
- Section 100 – Amendment to Section 50 of the CGST Act, 2017 (Interest on delayed payment of tax)
- Central Goods and Services Tax Act, 2017 (via amendment):
- Section 50(1) – Interest to be charged only on net cash liability
Summary of Notification
Implementation Date for Interest on Net Tax Liability Provision – Section 50(1) Amendment:
Through this notification, the Central Government appoints the 1st day of September 2020 as the date on which Section 100 of the Finance (No. 2) Act, 2019 shall come into force.
📌 Section 100 of the Finance Act amends Section 50(1) of the CGST Act, 2017 to clarify that interest on delayed payment of tax shall be payable only on the net tax liability paid in cash, and not on ITC portion.
💡 This amendment resolves long-standing disputes on interest computation and aligns with taxpayer expectations, though it becomes operational prospectively from 1st September 2020 (not retrospectively).
