Hello friends greetings for the day, in the current article we will discuss about interest on delayed payment of tax and we will also discuss interest for any mismatch of claim of input tax credit.

INTEREST ON DELAYED PAYMENT

As per section 50(1) of CGST Act 2017, every person who is liable to pay tax in accordance with the provisions of this act or rules made thereunder but fails to pay tax or any part thereof to the government within the prescribed time then he shall for the period for which the tax or any part thereof remains unpaid, pay on his own “Interest at such rate” not exceeding eighteen per cent as may be notified by the government on the recommendation of the council.

NOTIFICATION NO 13/2017 DATED 28.06.2017

As per notification no 13/2017, the rate of interest for delayed payment or late payment of GST is 18%.

As per section 50(1) read with notification no 13/2017 is can be said that if any supplier who is liable to pay tax under this act but fails to pay tax to the government. Supplier has to file GST R 3/3B and last date to file is 20th of the next month so he has to pay the tax to government before or upto the date of 20th of next month. However if supplier is not able to pay the tax uptu the prescribed time limit then he is liable to pay interest at the rate of 18% for period for which tax or any part remains unpaid.

COMPUTATION OF PERIOD FOR INTEREST CALCULATION

As per section 50(2) of CGST Act 2017, the interest under sub-section (1) shall be calculated in such manner as may be prescribed, from the day succeeding the day on which such tax was due to be paid.

INTEREST ON UNMATCHED INPUT TAX CREDIT

  • As per section 42(10) of CGST Act deals with contravention of provisions for matching the claims for “Input tax credit” by a recipient. As per section 50(3) if there has been any undue or excess claim of input tax credit then interest at the rate of 24% would be applicable.
  • As per section 43(10) of CGST Act it deals with contraventions of provisions for matching of claims for reduction in output tax liability by a supplier. As per 50(3) of CGST Act if there has been undue or excess reduction in output tax liability then interest at the rate of 24% would be applicable.

NOTIFICATION NO 13/2017 DATED 28.06.2017

As per notification no 13/2017, the rate of interest as 24%.

In case of any doubts in the current topic or provisions of Indirect taxation (GST and CUSTOMS) then you may contact us at abhutpurv@gmail.com

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10 Comments

  1. venkat says:

    tax amount fully paid before due date. GSTR 3B will filled in after due date.how to interest calculated.
    1.interest calculated Challan paid or GSTR 3B Return Filled Date.

  2. venkat says:

    tax amount paid before due date. GSTR 3B will filled in after due date.how to interest calculated.
    1.interest calculated Challan paid or GSTR 3B Return Filled Date.

  3. Nitesh Palial says:

    I have tax liability of 1000 in CGST and 500 in SGST and i am 1 month delayed in filling return then my interest will be rs. 15 in cgst and 7.5 in sgst, but portal accept only same amount means either 15 or 7.5. Is it correct or any technical problem in 3b portal. Please reply

  4. LALIT says:

    we have claimed GST INPUT in March, 2018 whereas the vendor has deposited GST in August, 2018 which was paid by us in Feb.2018. Pls clarify whether we should pay delayed interest or the vendor has to pay as per GST rules.

  5. Manzar Anjum says:

    Dear Sir,
    Say example, my tax tax on my outward supplies Rs. 1000 and tax paid on Inward supplies Rs. 300 of the same month, so net GST liability has to pay Rs. 700.

    But if I am late in filing GSTR 3B, so Interest will be calculated for delayed period on which amount Rs. 1000 OR Rs. 700?
    GST CPC help desk is advising to calculate on Rs. 1000. I am not convinced with logic.

    Plz clarify.
    Thank you in advance.

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