GST- Interest Calculator

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This discussion clarifies when interest is applicable for late GST payments. While interest is generally calculated on the net cash liability, it is still payable even if you have sufficient input tax credit (ITC) available. This is particularly true if you are reporting an invoice from a previous month in a later return, as opposed to filing the return late for the original period.

Anouja Thyagarajan

Anouja Thyagarajan (Querist)

09 March 2022 Hon'ble Members,
I had filed GSTR 3B for Jan 22 disclosing liability for Jan 22 as well as 1 bill of Dec21, i had mentioned it in new feature i.e voluntary GST bifurcation month wise but, I have query since interest on late payment of GST is applicable on net amount paid in cash and not gross liability. I already have credit ledger balance which is more than the liability therefore interest should not be charge in my case right?
Please suggest a solution.

R. B. Yadav (CMA, LLB)

R. B. Yadav (CMA, LLB) (Expert)

09 March 2022 As you are reporting Dec-21 month invoice in your Jan-22 return, you are liable to deposit the interest on late payment of GST irrespective of set off this payment with cash or input credit.

Anouja Thyagarajan

Anouja Thyagarajan (Querist)

09 March 2022 Sir,
I just wanted to clarify isn't interest on net cash payment only, if my accumulated ITC balance for the year is more than liability to be paid then also i have to pay interest?

R. B. Yadav (CMA, LLB)

R. B. Yadav (CMA, LLB) (Expert)

09 March 2022 It is on net cash liability when you would have declared Dec-21 month invoices in the same month itself but return is filed late. As in your case because you are declaring previous month invoice in subsequent month, you need to pay interest. Please refer section 100 of the finance(No 2) act, 2019

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