Learn about the calculation of GST interest on both GST payable and refunds under the Goods and Services Tax (GST) regime. Understand the rates, periods, and scenarios for interest payment and receipt. Stay informed to comply with GST regulations.
Under the Goods and Services Tax (GST) regime, taxpayers are required to comply with various provisions, including the timely payment of GST liabilities and claiming refunds when applicable. The law also specifies the payment of interest in cases of delayed payment of GST or delayed refund of GST.
Under the Goods and Services Tax (GST) regime, taxpayers are required to comply with various provisions, including the timely payment of GST liabilities and claiming refunds when applicable. The law also specifies the payment of interest in cases of delayed payment of GST or delayed refund of GST. This article aims to provide an overview of the calculation of GST interest on GST payable and refund under GST.
This article aims to provide an overview of the calculation of GST interest on GST payable and refund under GST.
All Interest Calculation under Goods and Service tax (GST)
| Description | Interest Payment on | Interest Rate | Period | |||
| From | To | |||||
| Interest Payable to Department (Govt) | Delayed Payment of tax | On Net Tax i.e. after utilizing ITC | Normal Case | 18% p.a. | Day Immediately succeeding due date of payment of tax | Date of Payment of tax |
| On Gross Tax | In case where notice u/s 73* & 74** invoked by department | 18% p.a. | Day Immediately succeeding due date of payment of tax | Date of Payment of tax | ||
| *Note:- Section 73 of CGST states notice in case other than fraud | ||||||
| **Note:- Section 74 of CGST states notice in case where fraud involved | ||||||
| Utilisation of wrongly availed ITC | Excess ITC Utilised | – | 18%p.a. | Date of Utilisation | Reversal of ITC or Payment of tax | |
| Final Assessed tax > Provisional tax | Differential Amount = Final – Provisional assessed | – | 18%p.a. | Day Immediately succeeding due date of payment of tax | Date of Payment of tax | |
| Example | ||||||
| Case I | Registered Person fails to file GSTR-3B for the month of April on or before due date & GST payable is Rs 1,00,000. He files GSTR-3B for April & pays tax on 10th June. Due date of GSTR-3B for April month is 20th May | |||||
| Interest Calculation = | Interest = 100000*18%*(11days of may+ 10days of June)/365 | |||||
| Interest = 1035.62 | ||||||
| Case II | He spent on purchase of vehicle for director of company, on which he availed and utilised the ITC of Rs 50,000. ITC credited in E-Credit Ledger on 20th April but utilised for payment on 10th June. Reversal or payment of wrongly utilised ITC on 20th July | |||||
| As per Section 17(5)(a), ITC on Motor Vehicle having seating capacity 13 or less (including driver) is blocked under GST law, unless used for further supply or for imparting training. | ||||||
| Interest Calculation = | Interest = 50000*18%*(21days of June+ 20 days of July)/365 | |||||
| Interest = 1010.96 | ||||||
| Case III | He requested department to provisionally assess the tax regarding value of supply or rate of tax. Department assessed tax say Rs 150000 on 20th June & thereafter on final assessment of tax on 20th September, tax Rs 200000 becomes payable. Hence he, registered person now required to pay interest on differential amount i.e. Rs 50000 | |||||
| Interest Calculation = | Interest = 50000*18%*(10days (June)+ 31 +31+20days (Sept))/365 | |||||
| Total Days= 92 days | ||||||
| Interest = 2268.49 | ||||||
| Description | Remark | Interest Receivable on | Interest Rate | Period | ||
| From | To | |||||
| Interest Receivable from Department (Govt) | Delayed Refund beyond 60 days from date of filing refund application | – | Amount of Refund | 6% p.a. | After expiry of 60 days from date of filing refund claim | Date of Refund received |
| Delayed Refund beyond 60 days from date of filing refund application | Refund granted by court order | Amount of Refund | 9% p.a. | After expiry of 60 days from date of filing refund claim | Date of Refund received | |
| Final Assessed tax < Provisional tax | – | Differential Amount = Provisional assessed – Final | 6% p.a. | After expiry of 60 days from date of filing refund claim | Date of Refund received | |
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