Calculation of interest for delay submission of gstr3b

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Palash Ghosh (Querist)
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16 January 2019 Dear Experts,

We have received notice from State GST department to make payment of Interest u/s 50(1) for delayed payment/ set off of tax due to late submission of GSTR3B.
Authority is calculating interest on gross output of GST instead of net liability, i.e. say Output GST 20000, Input GST 19000, so net Liability 1000. Authority is calculating interest on 20000 instead of 1000.
Kindly provide proper way of calculation of interest with supporting provision law / case law.

CA ANUBHAV

CA ANUBHAV (Expert)
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18 January 2019 18% on net liability should be calculated on the basis of principle of natural justice.. to make them clear you can take help from income tax provisions that interest is charged on net amount after reducing TDS and other prepaid taxes..