Interest when last month's sales are reported later

Yes, interest is due for the delay on tax that was not paid on time. The cash-only benefit in Sec 50(1) is for supplies declared in the late return of the same period; for sales shifted to a later return, the treatment of ITC lying in the ledger is debated.

Say ₹1,00,000 of March sales, with ₹18,000 tax, were reported in April's 3B. A cautious approach pays interest on ₹18,000 for the days between 20 April and 20 May, about ₹266. Some argue that if enough ITC was in the ledger all along, interest should be only on any cash shortfall. Pay the cautious amount if small, and seek advice if large.