Judicial Corner: No interest liability if GST tax credited in Electronic Cash Ledger before due date, even if debited later – Madras High Court (09.07.2025)

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No interest liability if GST tax credited in Electronic Cash Ledger before due date, even if debited later – Madras High Court { Tamilnadu State Transport Corp. V/s Addt. Comm (CT) Chennai – (2025) 31 Centax 305 (Mad.)}

 

Facts:

  • Assessee had deposited the full GST tax liability in the Electronic Cash Ledger (ECL) before the due date.
  • However, the actual payment of tax (i.e., debiting of the ECL) was done later while filing the return after the due date.
  • The department levied interest under Section 50, read with Section 73(1) of the CGST Act, alleging delayed payment of tax.

Issue:

  • Whether interest is payable when the tax amount is deposited in the Electronic Cash Ledger before the due date, but debited later through return filing.

Held:

  • As per Rule 88B(1) of the CGST Rules, interest liability ceases from the date the amount is credited in the Electronic Cash Ledger.
  • Since the tax was already deposited in ECL before the due date, no interest is payable, even if the return was filed (and cash debited) later.
  • The interest portion of the demand was quashed.