Goods and Services Tax (GST) has streamlined taxation in India, but complexities arise when adhering to compliance deadlines. A recent ruling by the Hon’ble Madras High Court in the case of M/s. Eicher Motors Ltd. sheds light on a crucial aspect of GST – the liability for interest. In essence, the court emphasized that an assessee may not be liable to pay interest if the GST amount is deposited within the prescribed time, even if the returns in Form GSTR-3B are filed belatedly.

The Eicher Motors Case: 

In a landmark decision, the Madras High Court clarified the scenario where an assessee faced delays in filing GSTR-3B due to technical glitches in the GST portal. M/s. Eicher Motors, a motorcycle manufacturer, deposited the required GST amount within the stipulated time using Input Tax Credit and cash. The court ruled that the delay in filing returns caused by issues in transitioning accumulated CENVAT Credit did not warrant interest payment, as the GST amount had been deposited timely.

Key Takeaways:

Timely Deposit vs. Belated Filing:

• The court distinguished between the act of depositing GST within the prescribed time and the filing of GSTR-3B returns post the due date.
• Emphasized that the ultimate discharge of tax liability occurs when the amount is credited to the government's account.

Legal Basis:

• Referenced Section 39(7) of the Central Goods and Service Tax Act, which dictates that the credit to the government's account must happen not later than the last date for filing monthly returns.

Immediate Crediting and Tax Liability:

• Highlighted the immediacy of crediting the amount to the government's account upon payment through GST PMT-06.
• Quoted Section 50(1) of the CGST Act, asserting that interest liability arises only for the delayed period after the filing of monthly returns.

Precedents and Judicial Consistency:

• Noted discrepancies with judgments from other High Courts, reinforcing the court’s interpretation of GST laws.

Implications for Assessees:

Understanding the implications of the Eicher Motors case is crucial for businesses navigating GST compliance. Assessees should focus on timely deposit of GST amounts within the stipulated period, recognizing the importance of immediate crediting to the government's account. The ruling aligns with a taxpayer-friendly approach, emphasizing adherence to deposit timelines over penalizing belated filing due to technical glitches.

Conclusion:

The Eicher Motors case sets a precedent that prioritizes the timely deposit of GST amounts. Assessees facing challenges in filing returns due to technical issues should take note of this ruling and ensure that GST payments are made within the prescribed timeframe. By doing so, businesses can potentially avoid interest liabilities even if returns are filed belatedly, contributing to a smoother and more compliant GST landscape. Stay informed, stay compliant.