Answer

1. F

   Facts

   Unpaid interest is a dues amount like tax. It can be demanded through notices and recovered under the recovery provisions, including from bank accounts.

2. P

   Provisions and law

   • Sec 50(1), CGST Act 2017Interest is payable on tax paid late for the period of delay at the notified rate (18 percent a year); on a late return it is levied only on the portion paid in cash, except where proceedings under Sec 73, 74 or 74A have started.
   • Sec 73(1), CGST Act 2017Show cause notice for tax not paid, short paid or ITC wrongly availed for reasons other than fraud, for periods up to FY 2023-24.
   • Sec 74A, CGST Act 2017For FY 2024-25 onwards, one procedure for demands: notice within 42 months of the annual return due date, order within 12 months of the notice; penalty depends on whether fraud is alleged.
3. A

   Analysis

   Interest that is clearly payable on admitted tax, such as for a late return, may be recovered without a separate notice in some cases, as courts have held for self-assessed tax. For disputed tax, interest follows the outcome. Pay admitted interest promptly. Keep track through the electronic liability register.

4. C

   Conclusion

   1. 1Check the electronic liability register for interest dues.
   2. 2Pay admitted interest promptly.
   3. 3Dispute only where tax itself is disputed.
   4. 4Keep records of payments.

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