Answer

1. F

   Facts

   Interest at 18 percent a year under Sec 50(1) is charged on tax paid late. Since the Rule 88B amendment, interest on late filing is charged only on the part of the tax paid in cash, not on the part set off from ITC already in the ledger.

2. P

   Provisions and law

   • Sec 50(1), CGST Act 2017Interest at 18 percent a year on tax paid late, on the part paid in cash
   • Rule 88B, CGST Rules 2017How interest is computed on late cash payment and on wrongly utilised ITC
3. A

   Analysis

   Suppose your tax for the month is ₹2,00,000, ITC covers ₹1,50,000 and you pay ₹50,000 in cash 10 days late. Interest is ₹50,000 x 18% x 10 / 365, which is about ₹247. You declare it in Table 5.1 of the next GSTR-3B and pay it in cash. Interest cannot be paid from the credit ledger.

4. C

   Conclusion

   1. 1Find the cash portion of tax that was paid late
   2. 2Count the days from the due date to the payment date
   3. 3Compute interest at 18 percent a year on that cash amount
   4. 4Declare it in GSTR-3B Table 5.1 and pay through the cash ledger

Not paying self-assessed interest is a common reason for DRC-01A and DRC-01 notices later.

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