"WAIVER OF INTEREST"

"WAIVER OF INTEREST"

Interest, which is compensatory in nature, is typically charged when there is a delay in paying taxes.

In GST, assessments are conducted after a significant period, and with an 18% pa interest rate, the interest amount can be equivalent to the tax owed.

1. Punjab and Haryana High Court in Baso Devi vs CBDT (22-Feb-2024)

Due to old age and illiteracy of assessee the Income Tax Return was not filed. It was filed within four days of receipt of Notice. Interest under ss. 234A, 234B and 234C is liable to be waived.

2. Kerala High Court in V.M. Mathai vs Principal Commissioner of Income-Tax, Kochi (10-Aug-2016)

Where Commissioner had not considered fact that assessee and his wife were suffering from bipolar disorder and assessee had already paid a part of tax, assessee's application for waiver of interest was to be reconsidered.

3. Karnataka HC in Shankarlal Jain vs Commissioner of Income Tax (26-Nov-2019)

The delay caused in filing the return if to be attributed to the impounding of the documents during survey proceedings, the interest under s. 234A could be waived but not interest U/s 234B and 234C

Conclusion:

GST being new law doesn't have much discussion on this issue but it would be an important topic in future as there would be genuine cases where the amount of interest would be financial hardship to the person.

To get waiver or reduction in interest, the onus is on the taxpayer to demonstrate that the delay was due to reasons beyond their control and that they have otherwise complied with GST regulations.

Situations beyond the control of the taxpayer, such as natural calamities, technical glitches in the GSTN portal, or genuine financial hardships, can help.

Thanks and Regards

Abhishek Raja Ram

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