To

…………………………. ….                                                                                                                                                               Date: ……………….

………………………………….

……………………………..

IN THE MATTER OF ASSESEE:

M/s………………………………………….

GSTIN: ………………………….

And in the matter of

FORM GST DRC-07 Summary of the order Reference No: ………………….

Respected Sir,

This Submission is in reference to Summary of the order DRC-07 Reference No: ………………… received by us on ……………… regarding non-payment of interest for the tax period Jan. 2020- Mar. 2020.

Content of the Order is as below:

4. Details of demand (Amount in Rs.)

 Our Reply in the above matter is as below:

We have received the said order and noted the contents thereof. In the said or your goodself has cited that there is a non-payment of interest on a/c. of de filing of GSTR. 3B Return and have called upon for the payment of interest of same.

We beg to state that the delay in the returns of GSTR 3B for the various months 18 because of various technical glitches in the GST portal, it took several attempts to upload and save the data and even after saving it due to technical faults the whole page became bank, we had faced tremendous pressure to submit it. Hence the issue was of delayed return filing. There are several instances where the department itself has accepted the technical glitches and the portal slow-down. Consequently, the due dates of the GST returns have also been extended on various occasions, the Filing of return was a procedural hardship for an assessee and Government officials themselves faced various procedural issues. It is totally unjust to charge interest for delay in return filing. We already suffered huge business losses due to the technical glitches under GST & procedural issues.

The said action of charging interest meted out to the petitioner by The Department is against The Right to Equality guaranteed by Article 14 of The Constitution of India. It is the first fundamental right assured to the people of India.

The orientation given to Article 14 which guards citizens against arbitrary action of The Govt has been explained by Bhagwati, J., in Bachan Singh Vs. State of Punjab, Rule of law which permeates the entire fabric of the Indian Constitution excludes arbitrariness. “Whenever we find arbitrariness or unreasonableness there the denial of rule of law”. Article 14 enacts primarily a guarantee against arbitrariness and inhibits state action, whether legislative or executive, which suffers from the vice of arbitrariness. “Every state action must be non-arbitrary and reasonable. Otherwise, the court would strike it down as invalid.”

Again due to Difficulty in filing e-return penalty was waived off in various cases also by the Government itself in the case of, 2018 (1) TMI 948 – (MAD-HC) Rajaguru Spinning Mills PVT. Ltd. Versus The Secretary, Ministry Of Finance, The Chief Executive Officer, Goods And Services Tax Network, East Wing, The Principal Chief Commissioner, O/O. The Principal Commercial Of GST And Central Excise, The Commissioner, Commercial Taxes, The Commissioner, GST & Central Excise, The Joint Commissioner, Commercial Taxes The Assistant Commissioner, GST & Central Excise. The Superintendent. UST & Central Excise, Erode-II Division, The Assistant Commissioner, Commercial Taxes

It was held that taking note of the fact that the penalty fee has been waived for three months i.e. July, August and September 2017.

Notwithstanding the above, as per the Press Release issued after 31 GST council Meeting, dated 22.12.2018 the Amendment of section 50 of the CGST Act provides, that interest should be charged only on the met tax liability of the taxpayer, after taking into account the admissible input tax credit, i.e. interest would be leviable only on the amount payable through the electronic cash ledger.

Further under clause 99 of the Finance Bill, 2019 – In section 50 of the Central Goods and Services Tax Act, in sub-section (1), provides that the interest on lay payable in respect of supplies made during a tax period and declared in the return for the said period furnished after the due date in accordance with the provisions of section 39, except where such return is furnished after commencement of any proceedings under section 73 or section 74 in respect of the said period, shall be levied on that portion of the tax that is paid by debiting the electronic cash ledger.

In the instant case, we had the utilized ITC balance in the electronic credit ledger available during the aforesaid period and apart from Reverse charge liability there was no liability to pay tax in cash because the Electronic Credit Ledger had sufficient balance of unutilised ITC.

It is pertinent to not here that the reverse charge liability is also just a procedural matter to track certain transactions. It has no cash impact as ITO is available as soon as the payment for reverse charge is done. However in the interest of reducing litigation and under protest, we undertake to pay the interest on such delay in payment of reverse charge liability in cash as per the calculation below:

 In view of the above, it is prayed before your honor to kindly accept our explanation in the matter of delay in filing GSTR-3B for the months of January 2020, February 2020 and March 2020 and kindly revise the Summary of Order (DRC-07) so that we can make the interest payment as per the above calculation.

For this act of kindness, you petitioner as duty bound shall always be grateful.

Thanking you

Yours faithfully

For M/s

Authorized Signatory

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