Demand of Tax Under GST by Tax Authorities

Since the implementation of the Goods and Services Tax (GST) Act in India, every registered taxpayer is required to comply with the provisions of the Act, which includes paying taxes on time. If there is any default in payment of taxes, the tax authorities can take necessary actions to demand payment of unpaid taxes, along with interest and penalties.

Here, we will discuss the demand of tax by the tax authorities under GST and the applicability of interest on the demand.

Demand of Tax Under GST

As per the GST Act, if a registered taxpayer fails to pay the tax due, the tax authorities can raise a demand for payment of such tax. The tax authorities can also raise a demand for payment of tax if they find any discrepancy in the returns filed by the taxpayer.

The demand for payment of tax can be raised by the tax authorities through a notice in writing, specifying the amount of tax that is due, along with interest and penalty, if any. The taxpayer is required to pay the amount within the specified time frame, failing which, the tax authorities can take necessary actions to recover the amount.

Applicability of Interest on GST Demand

When a demand for payment of tax is raised by the tax authorities, the taxpayer is required to pay the amount within the specified time frame. If the taxpayer fails to pay the amount within the specified time frame, interest is applicable on the unpaid amount.

The interest is calculated from the due date of payment of the tax till the date of actual payment. The rate of interest is 18% per annum, and it is calculated on the unpaid amount. The interest is payable along with the tax amount demanded by the tax authorities.

The interest rate for delayed payment of tax under GST is higher than the interest rate under the earlier tax regime. Therefore, it is important for the taxpayers to comply with the provisions of the GST Act and pay the taxes on time to avoid any interest liability.

Conclusion

The demand of tax by the tax authorities under GST and the applicability of interest on the demand is an important aspect that every registered taxpayer should be aware of. The taxpayers should ensure that they comply with the provisions of the GST Act and pay the taxes on time to avoid any demand for payment of tax by the tax authorities.

Moreover, the taxpayers should also make sure that they file their returns accurately and in a timely manner to avoid any discrepancy in the returns and any consequent demand for payment of tax by the tax authorities.