Interest on Late of Payment of Liablity

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This query is : Resolved

Quick Summary

Interest under GST on delayed liability is generally applicable from due date till payment date. However, where sufficient balance exists in electronic credit ledger throughout, taxpayer can argue under Rule 88B(2) that no actual cash delay occurred, supporting zero interest liability in DRC-03 cases.

R Hiremath

R Hiremath (Querist)

20 February 2026 Respected Sir,
I have a query kindly guide me in this, For Example
Mr. A has missed to show Turnover of 1,00,000 in FY 2022-23. But, While filling Annual Return he found and declared that in Annual return and made Payment Voluntarily through DRC 03 on 22.02.2024 from Credit Ledger. And throughout the Period he has sufficient Credit Ledger Balance.

Here My Question is, Is Interest applicable on Gross liablity or Not ?

Ram Avtar Singh

Ram Avtar Singh (Expert)

20 February 2026 Interest applicable @18% from bill date to next month 20th to GST Paid date.

R Hiremath

R Hiremath (Querist)

20 February 2026 Thanks for your kind response sir, My question here is Interest on Gross Liablity or Net Liablity.

Ram Avtar Singh

Ram Avtar Singh (Expert)

21 February 2026 interest on GST Only

R Hiremath

R Hiremath (Querist)

21 February 2026 Thanks for your kind response sir. But my question is regarding applicability of 88B(1) or 88B(2) ?

Aashok Kumar Sharma online

Aashok Kumar Sharma

(Expert)

23 February 2026 While Rule 88B(2) is the provision that technically governs payments made via DRC-03 for past omissions, you should argue for Zero Interest liability. Because Mr. A had a continuous and sufficient Credit Ledger balance, the delay did not result in a loss of revenue to the government.

R Hiremath

R Hiremath (Querist)

23 February 2026 Thank you for your kind response sir.

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