GST
No interest on cash deposited before due date
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Facts
No, for that amount. Rule 88B(1) excludes amounts credited to the cash ledger on or before the due date and kept there till the return debits them.
Provisions and law
- Rule 88B, CGST Rules 2017Interest on a late return is on the cash portion only; amounts already in the cash ledger by the due date are excluded; interest on wrongly availed ITC runs from utilisation till reversal.
- 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.
Analysis
If you paid ₹60,000 by PMT-06 on 18 July and filed July's 3B on 5 August, no interest arises on ₹60,000, provided the balance stayed in the ledger. If you used part of it for something else, that part is not protected. Late fee for the return still applies.
Conclusion
- Check the challan credit date in the cash ledger.
- Confirm the balance stayed until the return was filed.
- Exclude that amount from interest.
- Pay late fee for the late return.
A Savvy can do this for you
Interest on late tax payment, Sec 50
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