Clarifications on treatment of sales promotion schemes and secondary or post-sales discounts under GST.

Section 15 of the Central Goods and Services Act, 2017 (“the Act”) provided that the value of a supply of goods or services or both shall be the transaction value, which is the price actually paid or payable for the said supply of goods or services or both where the supplier and the recipient of the supply are not related and the price is the sole consideration for the supply. The sub-section (3) further clarified that the value of supply shall not include any discount which is given –

1. before or at the time of supply if such discount had been duly recorded in the invoice issued in respect of such supply; and
2. after the supply has been effected, if –

• such discount is established in terms of an agreement entered into at or before the time of such supply and specifically linked to relevant invoices; and
• input tax credit as is attributable to the discount on the basis of document issued by the supplier has been reversed by the recipient of the supply.

Recently, Central Board of Indirect Taxes and Customs ‘CBIC”) issued clarification on the treatment of sales promotions schemes under the GST vide Circular No. 92/11/2019-GST. The circular is intended to cover the several promotional schemes which are offered by taxable persons to increase sales volume and to attract new customers for their product, with regard to taxability, valuation, availability or otherwise of Input Tax Credit (“ITC”) in the hands of the supplier. The clarification is summarized as follows:

Scheme	Clarification on Taxability	Clarification on availability of ITC
Free Samples and Gifts	Samples that are supplied free of cost, without any consideration, do not qualify as “supply” under GST, except where the activity falls within the ambit of Schedule I of the Act.	ITC is not available to the supplier on the inputs, input services and capital goods to the extent they are used in relation to the gifts or free samples distributed without any consideration. However, where the activity of distribution of gifts or free samples falls within the scope of „supply‟ on account of the provisions contained in Schedule I of the said Act, the supplier would be eligible to avail of the ITC.

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Scheme	Clarification on Taxability	Clarification on availability of ITC
Buy one get one free offer	In case of buy one and get one offers, while it may seem that one items is being supplied free of cost, it is, in fact not an individual supply of free goods, but a case of two or more individual supplies where a single price is being charged for the entire supply. It can be best treated as supplying two goods for the price of one. Taxability of such supply will be dependent upon as to whether the supply is a composite supply, or a mixed supply and the rate of tax shall be determined as per the provisions of section 8 of the Act.	ITC shall be available to the supplier for the inputs, input services and capital goods used in relation to supply of goods or services or both as part of such offers.
Discounts including “Buy more, save more” offers –	Suppliers often offer staggered discounts (increase in discount rate with increase in purchase volume). Such discounts are shown on the invoice itself. Suppliers also sometimes offer, periodic/ year end discounts based on annual sale volumes. Such invoices though are not shown on the invoices, they are established in terms of an agreement entered into at or before the time of supply. Such discounts are passed on by the suppliers through credit notes. Discounts offered by suppliers to customers, including staggered discounts or the post-sale volume discounts established before or at the time of supply shall be excluded to determine the value of supply provided they satisfy the parameters laid down in section 15 (3), including the reversal of ITC by the recipient of the supply as is attributable to the discount on the basis of document (s) issued by the supplier.	The supplier shall be entitled to avail the ITC for such inputs, input services and capital goods used in relation to the supply of goods or services or both on such discounts

 

Scheme	Clarification on Taxability	Clarification on availability of ITC
Secondary discounts	These discounts are not known at the time of supply and are offered after the supply is already over. It has been clarified that the financial/commercial credit note(s) can be issued by the supplier even if the conditions Section 15 (3), i.e. the discounts being established before the sale and being recorded on the invoice, are not satisfied. It has been further clarified that the value of supply shall not exclude any such secondary discounts. In other words, the value of supply shall not exclude discounts issued by way of credit notes.	There is no impact on availability or otherwise of ITC in the hands of supplier in this case.

The above stated circular resulted in further queries being raised regarding the tax treatment in cases of the secondary discounts or post sale discounts. CBIC further issued Circular No. 105/24/2019-GST dated 28 June 2019 to provide clarification on these matters. The circular is further discussed as under:

For the purpose of value of supply, post sales discounts are governed by the provisions of 15 (3)(b) of the Act. It is crucial to examine the true nature of discount given by the supplier of goods to the dealer.

Type of secondary sale	Clarification on Taxability
Post-sale discount by the supplier the dealer without any further obligation or action required at the dealer’s end	The post sales discount will be related to the original supply of goods and it would not be included in the value of supply, in the hands of supplier of goods, subject to the fulfillment of provisions Section 15 (3) of the Act.
Additional discount given by supplier to the dealer, requiring the dealer to do some act like undertaking special sales drive, advertisement campaign, exhibition etc.	This will be treated as separate transaction and the additional discount will be the consideration for undertaking such activity. The dealer, being supplier of services, would be required to charge applicable GST on the value of such additional discount and the supplier of goods, being recipient of services, will be eligible to claim input tax credit.

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Type of secondary sale	Clarification on Taxability
Additional discount is given by the supplier of goods to the dealer to offer a special reduced price by the dealer to the customer to augment the sales volume	The additional discount would represent the consideration flowing from the Supplier of goods to the dealer for the supply made by dealer to the customer. This additional Discount is required to be added for the purpose of arriving Value of supply, in the hands of the dealer. The customer, if registered, would be eligible to claim ITC of the tax charged by the dealer only to the extent of the tax paid by the said customer to the dealer in view of second proviso to section 16 (2) of the Act.
Eligible ITC for the dealer on original invoice, if the discounts granted by the supplier of goods are not permitted to be excluded from the value of supply and the supplier issues financial / commercial credit notes	The dealer will not be required to reverse ITC attributable to the tax already paid on such post-sale discount received by him through issuance of financial / commercial credit notes by the supplier of goods, as long as the dealer pays the value of the supply as reduced after adjusting the amount of post-sale discount in terms of financial / commercial credit notes received by him from the supplier of goods plus the amount of original tax charged by the supplier.

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As  per  the  recent  judgement  of  Appellate  Authority  for  Advance Ruling1, Kerala it has been clarified that recovery of food expenses from employees for the canteen exclusively for employees provided by company comes under the definition of outward supplies and is therefore, taxable under Goods and Service Tax Act.

Issue under Consideration: – Whether the recovery of food expenses from employees for the running and maintenance of canteen run exclusively for employees by company falls under the definition of outward supplies and is taxable under Goods and Service Tax Act.

Facts of the Case: –

1. Applicant is a Private Limited Company engaged in manufacture and sale of foot wear
2. Applicant is providing canteen services exclusively for their employees and recover the running and maintenance expenses from employees without any profit

Analysis

Applicant’s Plea: –

1. Company is not carrying out any business activity and it is according to the requirement of law – Factories Act, 1948 I.e. company is only facilitating the supply of food to the employees, which is a statutory
2. requirement, and is recovering only the actual expenditure incurred in connection with the food supply, without making any profit.
3. Schedule III, Clause 1 of GST Act 2017, services by an employee to employer in the course of or in relation to his employment is neither a supply of goods, nor a supply of services and that any consideration received by the employee from his employer is outside the purview of GST.
4.  In the erstwhile Service tax regime as well, Notification 25/2012- ST in relation to Mega Exemptions wherein services in relation to supply of food or beverages by a canteen maintained in a factory covered under the Factories Act, 1948 was exempted.
5. Press release issued by CBIC(CBEC) regarding clarification of applicability of Reverse Charge under section 9(4) of the GST Act, 2017 on the purchase of ornaments by a jeweller from a customer – Jeweller will not be liable to pay tax under reverse charge mechanism on such purchases as the sale of jewellery does not paramount to be in the course of furtherance of business of the individual and hence, do not qualify as a supply perse. Relying on this, appellant contended that if an activity is not in the course or furtherance of one’s business, it does not constitute supply unless it is import of service as per Section 7(1) of GST Act, 2017. Additionally, contended that supply of subsidized food is not the business of the appellant, in the same manner as supply of gold jewellery was held not to be the business of the consumer
6. The assessee has relied upon judicial pronouncement by the Hon’ble High Court of Telangana in the case of M/s. Bhimas Hotels – stating that subsidized food to employees and realization of cost of wages is an industrial obligation it does not amount to service. Additionally, Government of India issued a press release on 10-07-2017, stating that supply by employer to employee is in the course of furtherance of business and comes under Schedule III, which is not liable to

Authority for Advance Ruling (AAR) and Appellate Authority for Advance Ruling
(AAAR): –

1. Schedule II to GST Act – Activities to be treated as supply of goods or supply of services

Clause 6 – Following Composite Supply is declared as a supply of service

“Supply, by way of or as part of any service or in any other manner whatsoever, of goods, being food or any other article for human consumption or any drink (other than alcoholic liquor for human consumption), where such supply or service is for cash, deferred payment or other valuable consideration.”

Even  though  there  is  no  profit  as  claimed  by  the  applicant  on  the supply  of  food  to  its  employees,  there  is  ‘supply’  as  provided  in Section 7(1)(a) of the GST Act, 2017. Thus, the appellant would fall under the definition of ‘supplier’ under section 2(105)  of GST Act, 2017.

2. Consideration – Section 2(31) of GST Act, 2017 provides that any payment made or to be made, whether in money or otherwise, in respect of, in response to, or for the inducement of, the supply of goods or services or both, whether by the recipient or by other person but shall not include and subsidy given by the Central Government or a State Government

Since the applicant recovers the cost of food from its employees, there is a consideration.

3. The decision of the High Court in Bhimas Hotels case pertains to the erstwhile Service Tax Law, when Service Tax and Value Added Tax stood on separate and independent footing. It was held that

“……the petitioner has paid the value added tax on the value of the food supplied to its workers. In respect of some assessment years, they have even been imposed with a penalty under the Andhra Pradesh value Added Tax Act, 2005. Therefore, once the State Authorities have treated the supply of food to the workers of the petitioner as sale, it is not open to the respondents to treat the same as service and impose a liability……”

4. Hence, the Hon’ble Court had decided upon a matter where the issue of double taxation was a relevant fact. As there is no possibility of such double taxation in the GST It is evident that the facts of the Bhimas Hotels case cannot be considered to be in part- materia with the facts of this case.

Our Remarks

Many companies follow the policy of providing meals to employees and deduct a certain amount from their respective salaries. The said judgement could increase the compliance burden many folds on the such companies and also increase the cost of doing business.

A wide definition of consideration under the GST Act, 2017 has and will lead to many non- business activities to fall under the ambit of supply and many corporates among other assessee will have to bear the burden of the same.

This can also have impact on the salaries of employees, since now either the company will bear the GST liability or will recover from the employees.

Since, in the above transaction major limb of it is involving Business to Consumers (B2C) transactions.

Also,  it  is  still  not  clear  the  above  transaction  would  be  taxable  at what rate, 5% (as canteen) without input credit or 18% as outdoor caterer with ITC.

In view of the order passed by AAAR, we will have to look on each and every aspect of employee benefits (perquisites) offered by employer to determine whether they are falling under the definition of supply and consideration. Therein, determining the taxability of such benefits.

Although, the above judgement is binding only on the applicant and the judicial authority, but it can be referred in other cases as well.

INTRODUCTION TO GST AUDIT

While the GST regime emphasizes self-assessment processes, the complexities involved in it make one wary.
At this juncture, it is clear that the GST law is not presently simple enough for an assessee to compute his total and taxable turnovers and duly report the same.
Thus, in order to ensure effective compliance with the various GST provisions and to ensure performance of audits in a systematic, transparent and fair manner, audit provisions have been incorporated under the GST Acts/ Rules.

Definition of the term “Audit”

Section 2(13) of the CGST Act/SGST Act provides

“Audit” means the examination of records, returns and other documents maintained or furnished by the registered person under the GST Acts or the rules made there under or under any other law for the time being in force to verify the correctness of turnover declared, taxes paid, refund claimed and input tax credit availed, and to assess his compliance with the provisions of the GST Acts or the rules made there under.

Audit under GST

Audit by a Chartered Accountant

Section 35(5) of the CGST Act/ SGST Act read with Rule 80(3) of the CGST/SGST Rules, 2017

• Registered person having turnover during a financial year s. 2 Crore or more shall get his accounts audited by a Chartered Accountant or a Cost Accountant
• The term “aggregate turnover” has been defined as under vide Section 2(6) of the CGST Act/SGST Act:

“Aggregate Turnover” means the aggregate value of all taxable supplies (excluding the value of inward supplies on which tax is payable by a person on reverse charge basis), exempt supplies, exports of goods or services or both and inter-State supplies of persons having the same Permanent Account Number, to be computed on  all  India  basis but excludes central tax, State tax, Union territory tax, integrated tax and cess

An    exhaustive    definition under  Section  2(6)  of  the CGST Act/SGST Act

Inclusions Taxable supply Exempt/ Nil rate supply An    exhaustive    definition under  Section  2(6)  of  the CGST Act/SGST Act Non-taxable supply – Alcoholic Liquor for Human Consumption and five specified Petroleum Products i.e. Petroleum Crude, Motor Spirit (Petrol), High Speed Diesel [HSD], Natural Gas and Aviation Turbine Fuel [ATF] Export of goods or services Supplies to branches in other states having same permanent account number

However, certain Exclusions shall be made while computing the Value of Aggregate Turnover

i) Value of Inward supplies on which tax is payable by a person on Reverse Charge basis. Examples of supplies subject to Reverse Charge are- Services provided by way of Sponsorship to any Body Corporate or Partnership Firm, Services supplied by a Director of a Company or Body Corporate to the said company or Body Corporate ii) Central Tax, State Tax, Union territory Tax, Integrated Tax and Cess

Statements and Documents

It shall be necessary for the registered person to submit to the proper officer the following Statements and Documents:

• A copy of the Audited Annual Accounts;
• Reconciliation Statement under Section 44(2) of the CGST Act/SGST Act e.

The aforesaid Reconciliation Statement shall be duly certified in FORM GSTR-9C, electronically through the common portal either directly or through a Facilitation Centre notified by the Commissioner.

• Other prescribed documents in the prescribed form and prescribed

It is also to be borne in mind that the Government is yet to prescribe the format of the Audit Report and Annexures thereto. Further, it is also not yet clear, whether auditor is required to identify and report the discrepancies month-wise or annually.

Appointment & Removal

Appointing Authority of GST Auditor

• In case of a company the appointment of the GST auditor shall be made by a resolution of the Board of Directors or by an officer of the company, if so authorized by the Board in this
• In case of a partnership firm or proprietary concern, the appointment can be made by a partner or the proprietor or a person authorized by the assessee. The acceptance of appointment by the proposed GST Auditor shall also be communicated in writing to the

Removal of GST Auditor

• Any resolution to remove a statutory auditor shall not be effective unless there are good and substantial grounds for the removal related to the conduct of the auditor with regard to the performance of his or her duties as auditor. However, the auditor cannot be removed on the ground that he has given an adverse or qualified Audit
• In the event an auditor has been removed without any valid grounds, the Ethical Standards Board of ICAI or ICWAI, as the case may be, can intervene and it may direct the incoming auditor not to accept the audit

 

GST  has  been  implemented with  effect  from  01.07.2017.  As  a  consequence,  during the financial year 2017-18, GST remained in force only for a period of nine months from 01.07.2017 to 31.03.2018.

The point of consideration is whether the above-mentioned   annual  turnover   limit of  Rs.  2  crore  for  audit  purposes  shall apply  proportionately  in  the  given  case for  a  period  of  nine  months  or  whether the foregoing limit shall apply as it is for a period of nine months ?

A suitable and immediate clarification from the Government(s) is required in this regard. However, considering the old laws and the interpretation thereof the aggregate turnover shall be considered for the nine months only

It can be inferred that only for the purpose of determining the eligibility of the assessee who is required to get its accounts audited by a Chartered Accountant or a Cost Accountant, the all India based turnover shall be considered.

The   turnover   limit   of   Rs.   2   Crore   shall   be computed by including turnover in all the States or Union territories, as the case may be, i.e. on all India basis under same PAN Furthermore,  the  foregoing  threshold  turnover limit of Rs. 2 Crore is same for assessee’s in all the States and Union Territories Thus, it can be safely inferred that no separate threshold limit has been specified for Special Category States. Since each of the State GST Acts also has the provisions relating to GST Audit, it appears that the GST audit shall be conducted state-wise

 

Nothing is more expensive than a missed opportunity – A penny saved is a penny earned

Any  rectifications  in  the  details  already  furnished  in  returns  of  July  2017  to  March  2018  may  be corrected/added  in  the  return  to  be  filed  for  the  month  of  September  2018.  Details  of  outward supplies can be modified on or before 31.10.2018 – due date for filing GSTR 1 and details of inward supplies on or before 20.10.2018 – due date for filing GSTR 3B.

·         Outward Supplies: –

1. Invoice pertaining to FY 2017-18 missed in GSTR 1 – The invoice may be added in GSTR 1 along with invoices of September 2018 in Table 4 with original date. If the tax pertaining to invoice is also not paid, the same may be added to taxable value and tax of the month of September 2018 respectively and, pay the tax along with interest from due date of payment of tax till date of actual payment. However, the Annual return format i.e. GSTR 9 does not provide the facility to add these types of missing invoices but the most suitable disclosures may be made in Point 10 of Form GSTR
2. B2B Invoice details wrongly entered in GSTR 1 –Here is a case where the invoice details are entered in GSTR 1 but some fields are wrongly mentioned. Some of the situations are:-
3. Error in GSTIN i.e. Invoice is in name of Mr. A but GSTR 1 is filed mentioning GSTIN of Mr. B,
4. Error in taxable value,
5. Error in tax rate, ,

These details may be modified in Table 9A, 9B, 9C of GSTR 1. The same may be disclosed in Part V, Point 10 or 11 in GSTR 9.

3. B2C details wrongly entered in GSTR 1–There will be again 3 types of errors in B2C details.

• B2B invoice entered as B2C – If an B2B invoice pertaining to month of January 2018 entered as B2C in GSTR 1 of January 2018, this error can be rectified by adding the invoice details in GSTR 1 of September 2018 along with September B2B invoices and amending the B2C supplies of January 2018 using Table 10 of GSTR 1.

If the invoice is already declared in GSTR 3B correctly, the liability is not affected and the same will not be disclosed anywhere in GSTR 9.

• B2C Intra-state supplies entered as Inter-state – If B2C supplies of an assessee from the state of Delhi entered as B2C supplies of Uttar Pradesh i.e. Intra state entered as inter-state, the same may be rectified using Table 10 of GSTR 1. However, if the same error is also continued in GSTR 3B too, the liability may be affected since IGST is paid instead of CGST+SGST. This can be rectified by paying CGST+SGST and claiming refund of IGST. The same needs to be disclosed in Part V, Point 10 of GSTR
• B2C Inter-State supplies wrongly entered as different state– If B2C supplies made to Uttar Pradesh was entered as B2C supplies to Punjab by a supplier registered in Delhi; the tax liability doesn’t change but the state mentioned is wrong. This also doesn’t affect the liability, but the wrong details need to be rectified for correct

·         Inward Supplies: –

4. Failed to avail ITC– Did you miss claiming ITC on any invoice pertaining to FY 2017-18, the same can be claimed upto the month of September 201 Include the same in

 

GSTR 3B of September 2018 and the ITC can be availed and utilised. These details are to be declared in GSTR 9.

5. GSTR 2A Vs GSTR 3B – Monthly data of GSTR 2A can be downloaded in Excel format now. Many assessee have been ignoring the reconciliation of ITC as per GSTR 3B with details available in GSTR 2 This reconciliation exercise should be a continuous process since it is a time consuming one, but major outcomes are as under:-
   • Any missed credits i.e. supply on which ITC is available but not availed will come under notice when the reconciliation is done. It is important to note that the ITC pertaining to FY 2017-18 cannot be availed after the return for the month of September 2018 is
   • There may be situations where ITC has been claimed as per Invoice issued by the supplier, but the supplier failed to file GSTR 1. If supplier doesn’t file GSTR 1, the invoice details doesn’t appear in GSTR 2 This exercise helps us to follow up with the supplier and intimating/educating them to file their GSTR 1.
6. Excess ITC claimed – There may be situations where excess ITC would have been claimed due to error. For example, instead of entering only tax amount in ITC IGST column in GSTR 3B, amount of purchases may be entered which inflates IGST ITC. The same may be rectified now by reversing the excess ITC availed by entering the amount to be reversed in Table 4(B)(2) of GSTR 3B for the month of September 2018 and the same may be disclosed in Part V Point 12 of GSTR

The situations discussed above are the most common issues which are required to be addressed in this September  return.  Now,  one  may  agree  that  September  month  is  made  crucial  even  from  indirect taxes point of view and hence please be cautious and re visit all the returns filed, reconcile with books of accounts and GSTR 2A and claim the missed ITC and rectify any errors that were made while filing the returns for FY 2017-18.

Through GST, Government has tried to digitize entire tax system to make it user friendly and easily accessible for everyone. As the system is automated, it will be calculating interest and late fee in case of any default.

If any registered person “fails to pay the taxes” to government or deposits the taxes after the due dates, then the registered person has to pay the interest as prescribed under different sections of GST Acts. Similarly, if the registered person has “claimed excess input credit” or “claimed input credit without their eligibility”, in such scenario also the registered person will be liable for interest payment.

There can  be  multiple reasons where  liability for  payment of  interest  can arise.  Defaults in  payment of output tax, excess credit availed & reversal of credit are some of the examples. Under GST regime, there are 2 rates have been prescribed for levy of interest. Section 50(1), which deals with late payment of output tax, interest rate chargeable will be 18% p.a, and under section 50(3) which deals with excess or undue input credit interest payable will be @ 24% p.a.

a) Situation covered under section 50(1) of CGST Act:

Tax Deposited after due date:

If     registered     person     has reported their correct  output tax liability in return but fails to pay on or before date, then taxpayer will be liable to  pay interest at the rate of 18% per annum. Such       period       of interest  calculation will  start from the next date of due date and  will  end  on  the  date  of payment.

Example: The        registered person  reported  tax  liability in      his      return      of      INR 10,00,000  for  the  month  of August  2017  for  which  due date was 20 September 2017 but made the payment of INR 10,00,000 on 1 October 2018, here   the   registered   person will be liable for interest for 11 days from 21  September to  1 October @18% per annum.

Output tax determined wrongly

If   the   registered   person   has under reported their output tax liability in return then they will be  liable  for  interest  @  18%, whenever   they   or  any   officer finds   that,   registered   person has  short  paid  tax  previously then  he  has  to  pay  taxes  along with interest of 18% per annum.

Example: Reason     for     such under reporting of liability can be  that  the  registered  person had  forgot  to  incorporate  one invoice  in  their  return  having tax   liability   of   2,00,000   and paid   the   tax   liability   as   per return only.

In  these  cases,  where  taxpayer under reported their output tax liability  then  they  have  to  pay interest @ 18% per annum1.

Input Credit wrongly availed

Whenever    registered    person availed   Input   credit   wrongly then  he  has  to  pay  interest  @ 18% per annum from the date of such excess claim to the date of payment.    Reasons    for    such excess   claim   can   be   Invoices received for having input credit of  200  (CGST+SGST)  but  the registered  person  claimed  400 (200+200) input credit.

Example: The registered person claimed input credit on food    and    beverage    services whereas  input  credit  on  such services  is  not  allowed  as  per section  17(5)  of  CGST  act.  In that  case  the registered person will be liable to pay interest @ 18% per annum from the date of input   credit   till   the   date   of payment.

b)  Situation covered under section 50(3) of CGST Act i.e. excess or undue Claim of Input Credit:

Whenever registered person availed excess Input credit on account of mismatch with actual inward supplies then he has to pay interest @ 24% per annum from the date of such excess claim to the

 

date  of  payment. Reasons  for  such  excess  claim  can  be  that  taxpayer  didn’t  receive  the  inward supplies but claimed input credit or supplies received in later months but claimed credit in current which is again will mis-match with vendors information for same month. Higher rate of interest is prescribed under that section is to avoid fake input credit without receiving actual supplies and to make the registered person disciplined to report their correct inwards supplies, which is match with vendors  records. Hence  whenever  input  credit  doesn’t  match  with  information  submitted  with vendor then higher rate of 24% per annum will be applicable.

 

Example: If recipient of supplies avails the input credit on the basis of actual supplies received but the supplier didn’t report such invoices in their GSTR 1, which results excess claim of input in the books of recipient, this case would be the case of Section 50(3), hence recipient will be liable for interest @24% per annum.

 

Other scenario where interest liability can arise and corresponding interest rate

• Reversal of input tax credit in the case of non-payment of consideration to supplier within 180 days from the date of invoices, Interest rate will be 18% per annum, the Interest period will start from the date of availing credit on such supplies till the date when the amount added to the output tax liability
• Inputs or capital goods that are not returned to the principal within year or 3 years respectively from the date of received by the Job worker, Interest rate will be 18% per annum, the Interest period will start from the date of delivery challan issued to the Job worker by the Principal till the date of reporting in output liability
• Any other defaults for short payment/non-payment or erroneously refunded, Interest rate will be 18% per annum for default
• If the registered person was required to pay IGST but wrongly paid CGST/SGST or vice versa then it will not be treated as default, hence interest liability will not

 

1 Basis for calculation of days will remain same as mentioned in above example.