Interest on short payment of GST

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GST Doctor on Tue May 23 2023

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If you have not filed the returns yet then you can file the delayed returns and declare the liability for each month in GSTR-1 and pay it in GSTR-3B by just paying the Interest on the Cash portion of the payment. Rule 88B(1) will be applicable which is reproduced below-

(1) In case, where the supplies made during a tax period are declared by the registered person in the return for the said period and the said return is furnished after the due date in accordance with provisions of section 39, except where such return is furnished after commencement of any proceedings under section 73 or section 74 in respect of the said period, the interest on tax payable in respect of such supplies shall be calculated on the portion of tax which is paid by debiting the electronic cash ledger, for the period of delay in filing the said return beyond the due date, at such rate as may be notified under sub-section (1) of section 50.

But if you have already filed the returns and and have not shown the invoices in correct month return but in subsequent month return, then the interest will be applicable on entire tax amount irrespective of whether it was paid using ITC or CASH. Rule 88B(2) will be applicable which is reproduced below-

(2) In all other cases, where interest is payable in accordance with sub section (1) of section 50, the interest shall be calculated on the amount of tax which remains unpaid, for the period starting from the date on which such tax was due to be paid till the date such tax is paid, at such rate as may be notified under sub-section (1) of section 50.

Also, in case any proceedings under section 73 or section 74 in respect of the said period is commenced, the interest needs to be paid on entire tax amount.

The Relevant Section and Rule are linked below fro your reference.

CGST Section 50(1)

CGST Rule 88B

Click here to read about Interest on ITC Reversals under GST

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