M/S Bright Performance Nutrition vs. Union Of INDIA

Facts

The petitioner, M/s Bright Performance Nutrition, filed a writ application before the Gujarat High Court challenging the levy of interest under Section 50(1) of the Central Goods and Services Tax Act, 2017. The core of the dispute was whether this interest should be calculated on the gross tax liability or the net tax liability after utilizing input tax credit. The petitioner's counsel stated that the entire tax liability had been discharged using the electronic credit ledger. The Court was also informed of a proposed amendment to Section 103 of the Finance Act, intended to clarify that interest is payable only on tax paid in cash, which was awaiting Presidential assent.

Held

The Court noted that a proposed amendment to Section 103 of the Finance Act was intended to clarify that interest under Section 50(1) of the CGST Act is payable only on the amount of tax paid in cash, i.e., through the electronic cash ledger, and not on the amount paid through the electronic credit ledger. The petitioner's counsel stated that their client had discharged the entire liability from the electronic credit ledger. In light of this statement and the impending amendment, the Court found no further adjudication was required in the present writ application. The application was disposed of with liberty to revive if any future difficulty arose. The ad-interim relief granted earlier was vacated.

Key Issues

1. Whether interest under Section 50(1) of the Central Goods and Services Tax Act, 2017, is leviable on the gross tax amount or the net tax amount after utilization of input tax credit? The petitioner argued that interest should be levied only on the net amount payable in cash, especially considering the proposed retrospective amendment to Section 103 of the Finance Act. The revenue's arguments are not recorded in the judgment. The Court noted that the petitioner had discharged its entire liability from the electronic credit ledger.