Facility for auto-computation of Interest for GSTR 3B:
1. Introduction –
As a facilitation measure for taxpayers and for assisting the taxpayers in doing a correct self-assessment, a new functionality of interest calculator is being released in GSTR-3B.
This functionality shall assist the taxpayers to arrive at the system computed interest on the basis of the tax liability values declared by the taxpayers.
The interest applicable, if any, on the tax liability declared in the GSTR-3B of a particular tax-period will be computed after the filing of the said GSTR-3B.
The system computed interest values will be auto-populated in the Table-5.1 of the GSTR-3B of the next tax-period. The facility would be similar to the collection of Late fees for GSTR-3B, filed after the Due date, posted in the next period’s GSTR-3B
2. Legal Provision –
As per Section 50 of the CGST Act, 2017 interest is payable for delayed payment of GST. The interest computed by the GST Portal has been developed as per provisions of Section-50 of the CGST Act, 2017, as amended.
3. Interest Calculator –
a. Consequently, interest liability for respect of supplies made during the present tax-period and declared in the GSTR-3B for this period will be calculated only on that portion of the tax which is paid by debiting the electronic cash ledger, i.e., tax paid in cash.
b. With respect to the liability pertaining to the previous tax-period(s), and paid in later GSTR-3B, the interest will be computed for the entire liability, whether paid by debiting the electronic cash ledger or electronic credit ledger.
4. Auto Population of System Computed Interest –
a. This new functionality will compute the minimum interest applicable on the basis of the values declared by the taxpayers in GSTR-3B for a particular tax-period. This system computed interest will be auto-populated in Table-5.1 of GSTR-3B for the next tax-period, the way it is done for the Late fees at present
b. The system computed interest values auto-populated in next GSTR-3B return will be kept editable, initially. However, the system generated PDF of filed GSTR-3B will contain both values: the System computed interest, and the user paid interest values.
5. Cases where interest payment is applicable
|Delayed filing of return||Delayed declaration of liability|
|If the current period GSTR-3B is filed after the ‘due date’, then interest will be applicable at prescribed rate of interest from the `due date’ of GSTR-3B for relevant period i.e. till the date of filing of the return||If the liability pertaining to previous tax-periods is discharged in the present GSTR-3B, then interest will be leviable from the `due date’ of return for the said previous period till the date of declaration of the liability in the return. Thus, as part of the interest calculator, a new feature has been provided to GSTR-3B for allowing taxpayers to voluntarily declare Tax-period wise break-up or If a taxpayer is discharging liability for any past period(s) in the present GSTR3B, then exact tax-period wise break-up of the same can be provided by the taxpayers. The interest will be thereafter computed by the system accordingly|
This shall enable reduction of disputes during assessment stages
6. Break up of Tax Liability – Current as well as part periods –
a. Furnishing tax-period wise break-up in GSTR-3B: The return in FORM GSTR-3B currently allows taxpayers to discharge tax liability for previous tax-periods also, in addition to the tax liability for the present period. However, the tax-period wise break-up of the tax liability is not available in GSTR-3B. Thus, for computing the exact interest liability, the information regarding the tax-period wise break-up of the consolidated tax liability declared by the taxpayer would be required by the system.
b. Tax Liability Break up (Voluntary) – In view of above, a new button has been added in GSTR-3B, called Tax Liability Breakup (Voluntary), and data is to be entered by clicking this button only by those taxpayers who are making payment for liability pertaining to earlier tax-periods in the present GSTR 3B. In cases where the present GSTR-3B consists of liability only for the present period, the taxpayers can ignore this button, and continue filing their return as usual.
7. Changes in User Experience –
|Taxpayers filing on or before Due date of GSTR-3B||Taxpayer filing GSTR-3B after Due date|
|Even after the interest calculator is enabled on the GST Portal, there will be absolutely no change in the user experience for the taxpayers who file their return on or before the Due date, and who have not made any delayed payment of tax liability pertaining to earlier period(s).
The taxpayer would still have the facility to provide the break-up of liability of the past period(s).
|For taxpayers who are filing after Due date,
a popup will be shown regarding the option to declare tax-period wise tax liability, if applicable to them. If they have any tax liability pertaining to any previous tax-period to declare, they may declare the same. If the entire liability pertains to the present period, then they may ignore this pop-up message, and continue their filing as usual. If no previous period tax liability is declared, by default the interest will be computed by assuming that the entire tax liability pertains to the present period
This facilitation measure is expected to assist the taxpayers by helping them with calculation of correct interest while filing of GSTR-3B and will thus improve ease in filing return under GST.
8. Annexure with illustrative example
This functionality will be made available on the GST Portal shortly, and the same will be intimated to the taxpayers. The details about functionality on computation of the interest, along with sample screenshots, is embedded below –
a. A monthly taxpayer is filing GSTR-3B for the tax period of October 2021. In the said GSTR-3B, the taxpayer has declared the following values in Table-3.1 of GSTR-3B –
|Nature of Supplies||Taxable Value||IGST||CGST||SGST/ UTGST||Cess|
|Outward taxable supplies (other than zero rated, nil rated and exempted)||10,00,000||90,000||45,000||45,000||2,80,000|
|Outward taxable supplies (Zero rated)||5,00,000||45,000||1,40,000|
|Other outward supplies (Nil rated, exempted)||10,000|
|Inward Supplies Liable to Reverse Charge||2,00,000||12,000||6,000||6,000||0|
|Non-GST outward Supplies||1,00,000|
|Total Tax Liability||1,47,000||51,000||51,000||4,20,000|
However, these consolidated tax liability values consist of not only for October 2021 but also for previous tax-periods of July, August & September 2021.
Hence, for the purposes of proper interest calculation, the taxpayer would be expected to declare the following tax-period wise break-up in GSTR-3B for October 2021, in the following manner –
|Tax Period||IGST||CGST||SGST/ UTGST||Cess|
b. The interest calculation could be thereafter done as per the aforesaid values declared by the taxpayer, easily by the system. However, this gap exists in the current GSTR-3B implementation, to cover which new feature has been added.
9. Feature to compute Interest in GSTR 3B –
a. Tax Liability Break-up (Voluntary) button in GSTR-3B: A new button called Tax Liability Break-up (Voluntary) will be provided in GSTR-3B for furnishing the tax-period wise break-up of tax liability. This button will appear in GSTR-3B on the payment page, below the Table 6.1 – Payment of tax.
b. The Tax Liability Break-up (Voluntary) button will be enabled only after clicking the ‘Make payment/Post credit to ledger’ button. Break-up of the tax period wise values can be furnished by the taxpayers after making payment of the liability for this period.
c. This button will also appear on the filing page of GSTR-3B –
d. If the taxpayers click on this button, they will be provided with an option of declaring tax period wise break-up of the tax liability discharged by them in this GSTR-3B. The values could be declared head-wise, and the total value for all the tax-periods put together should be equal to the tax liability paid in the GSTR-3B.
e. On clicking the Save button, the option to File GSTR-3B through EVC or DSC will be enabled –
10. Formulae for computation of Interest (Sec 50 of CGST Act, 2017) –
Depending on the number of tax-periods declared by the taxpayer in the tax-period wise breakup, the interest liability for each tax-period will be calculated separately as per this formula.
The interest values for different periods will then be added, and the total interest liability will be computed for each head by the system.
11. Auto Population of Interest –
a. The interest values computed above will be auto-populated in the Table 5.1 – Interest and Late fee for previous tax period of GSTR-3B of the next tax-period.
The break-up and the manner of interest computation can be viewed by clicking the System Generated GSTR-3B button on this page
12. System suggested values may be changed by Tax Payers –
Portal will not stop the users from changing the system computed interest values. However, the system will warn the taxpayers on downward editing of the interest values in any tax head. On downward editing of values, the concerned cell will become Red and the system computed values will also be shown during mouse hovering to caution the taxpayer from making a mistake
If the taxpayer attempts to file GSTR-3B with the downward edited values, the interest tile would become Red and also the system will provide a Warning regarding the same to the user.
However, despite these warnings, the system will not stop the taxpayers from filing their GSTR-3B with changed values
13. Information/warning Screen before submission and filing of GSTR 3B –
Detailed advisory on the interest calculator in GSTR-3B – Interest Calculator Advisory