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Interest on delayed payment of GST

P MURUGAN (ACCOUNTANT) (186 Points)

06 September 2019

if an assessee paid gst after due date, then interest is calculated whether taxable amount or otherwise the taxable amount after claimed ITC Amount?. please give your valuable reply.

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8 Replies

SUSHANT KUMAR (Employed) (258 Points)
Replied 06 September 2019

Interest shall be calculated @ 18% p.a after the due date of filling monthly return Gstr 3b upto date of actual payment. Interest shall be calculated on taxable amount

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Akshay Jain (Tax Consultant) (1024 Points)
Replied 06 September 2019

mr Sushant Kumar,
I hope you are going wrong, so the as -

interest will be calculated as follows
outward Tax - Input Tax credit = Tax Payable
on Tax payable you have to calculate the interest @ 18% for the days you are late formula is :

Tax Payable * no of days late / 365 * 18%

2 Like

Sajal Mandal (294 Points)
Replied 06 September 2019

Interest shall be calculated in Net Tax payable amount.

Akshay Jain (Tax Consultant) (1024 Points)
Replied 06 September 2019

yes sir interest will payable on net tax payable as given in previous calculation

V Hajib (Registered Insolvency Professional Registered Independent Director with MCA) (54 Points)
Replied 06 September 2019

Interest shall be levied @ 18% on NET tax liability, i.e. the amount of GST which has been paid thru Electronic Cash ledger, if supplies made during a tax period have been declared in return for said period, but furnished after the due date.

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Akshay Jain (Tax Consultant) (1024 Points)
Replied 06 September 2019

mr v hajib,
it doesnt means only cash ledger I have said net tax liability. then if you pay via credit ledgers or cash ledger it doesn't matters

you have to calculate interest on net tax liability.

Uttam (employee) (814 Points)
Replied 07 September 2019

Interest to be calculated on Net tax liability.

After Megha engineering and infra case of Telangana., govt has introduced proviso under section 50 in fin bill 2019 to give effect that interest to be paid on Net.

mehul (Student CA IPC / IPCC) (151 Points)
Replied 04 October 2019

So if your ITC balance is more than your payment liability, then no interest will be paid ??We can set of the late payment of tax fully with ITC balance (if we have so )