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Deposit of Tax in Electronic Cash Ledger is equivalent to deposit in Government Account, Interest u/s 50 not leviable for delayed filing of return: Madras High Court

Introduction

Recently, the Madras High Court in the case of M/s.Eicher Motors Limited Vs Superintendent of GST and Central Excise vide W.P.Nos.16866 & 22013 of 2023 and W.M.P.No.32200 of 2023 dated 23.01.2023, has held that the deposit of tax in Electronic Cash Ledger would amount to payment of tax and would not tantamount to failure to remit GST in time. Also, the Explanation (a) to Section 49 of GST Act, also clarifies that the deposit to ECL is nothing but deposit in Government Account maintained with RBI. The Court set aside the order of revenue, levying the interest u/s 50 of the Act on the self-assessed tax on the ground that the petitioner had belatedly filed the return in Form GSTR-3B, when the actual payment of tax made to the Government in terms of the explanation (a) to Section 49(11) of the Act.

Since, there is no failure to pay the tax in time, Therefore, levy of interest u/s Section 50(1) of GST Act is not attracted in this case. Further, the registered person is liable to pay interest under Section 50 of the CGST Act, only when there is any default in payment of GST, even subsequent to the due date for filing the monthly returns i.e., on or before 20th of every succeeding month, for the said delayed period alone.

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