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Interest at 18 percent a year applies on tax paid late in cash. Tax set off from ITC does not attract interest.
GST
Interest on tax paid late
Updated . Every paid answer is checked by a CA. Free AI answers are labelled until a CA verifies them.
Provisions
Sec 50(1), CGST Act 2017
Analysis
Sec 50(1) charges interest on the net cash liability from the day after the due date. Example: ₹60,000 tax paid in cash 90 days late; interest is about ₹60,000 x 18 percent x 90 / 365, roughly ₹2,660. Enter interest in GSTR-3B Table 5.1 if the portal does not compute it.
Close
- Work out the cash part of the tax.
- Calculate interest for the days of delay.
- Add it in the return.
- Pay it in cash with the tax.
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