Proviso to section 50(1) allows taxpayer to pay interest on the cash portion of his delayed payment. An exception is carved out that interest is payable on the gross amount if the return is filed after the initiation of proceeding by the Department u/s 73 or 74. The reasoning behind this provision is that the ITC balance was available with the tax payer and by delayed filing of the return (GSTR 3B) and delayed off setting of the liability, the Govt. is not deprived of the funds for the intervening period.
Source Taxguru
