All Additional Commissioner (Adm.), State Tax,

Commercial Taxes Department,

..................................

Subject: Administrative instructions for recovery of interest on net cash tax liability w.e.f. 01.07.2017.

On the captioned subject, based on the recommendations of the 35th meeting of the GST Council held on 21st June, 2019, the provision of section 50 was amended vide section 10 of the Rajasthan Goods and Services Tax (Amendment) Act, 2020 to provide for charging interest on the net cash tax liability. The said amendment was to be made effective from a date to be notified by the Government. Accordingly, the said provision was made effective vide notification No. F.12(46)FD/Tax/2017-III-222 dated the 26th August, 2020, w.e.f. 01.09.2020.

2. The GST Council, in its 39th meeting, held on 14th March, 2020 recommended interest to be charged on the net cash tax liability w.e.f. 01.07.2017 and accordingly, recommended the amendment of section 50 of the RGST Act, 2017 retrospectively w.e.f. 01.07.2017. The retrospective amendment in the GST laws would be carried out in due course through suitable legislation.

3. Post issuance of notification No. F.12(46)FD/Tax/2017-III-222 dated the 26th August, 2020, there were apprehensions raised by taxpayers that the said notification is issued contrary to the Council's recommendation to charge interest on net cash liability w.e.f. 01.07.2017. Consequently, a press release, dated 26.08.2020 was issued by Centre to clarify the position. Further, in order to implement the decision of the Council in its true spirit, and at the same time working within the present legal framework, it has been decided to address the issue through administrative arrangements, as under:

a. For the period 01.07.2017 to 31.08.2020, field formations in your jurisdiction may be instructed to recover interest only on the net cash tax liability (i.e. that portion of the tax has been paid by debiting the electronic cash ledger or is payable through cash ledger); and

b. wherever SCNs have been issued on gross tax payable, the same may be kept on hold till the retrospective amendment in section 50 of the RGST Act is carried out.

c. You are directed to submit the information referred in point 'b' above in the Performa given below within 15 days of issuance of these instructions to ACCT MEA on his email id: acct-iar@rajasthan.gov.in .

Name of Zone:-

All Additional Commissioner (Adm.) shall ensure the strict compliance of the above instructions.

(Abhishek Bhagotia)

Chief Commissioner State Tax,

Rajasthan, Jaipur