Eicher Motors verdict: Unravelling the endless tale of interest liability on delayed payment of tax in GST

The levy of interest on delayed payment of tax is essentially compensatory in nature, distinct from penalty, which has a punitive character. Section 50 of the Central Goods and Services Tax Act, 2017 (“CGST Act”) lays down the provisions for the imposition of interest on delayed payment of tax and for wrongful utilisation of Input Tax Credit (“ITC”). Section 50(1) states th…