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Doubt on interest calculation of tax liability

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Ramachandran R

128 Points Posted on 24 November 2020

Hi all,

I have the following doubt on calculating interest for the tax liability.

Let consider tax amount is 10000 & ITC available is 5000.

Should I calculate interest after reducing ITC or should calculate interest for full tax amount of 10000

Thanks in adavnce

Replies (2)

Quick Summary

This discussion clarifies how to calculate interest on GST tax liability. The consensus is that interest should be calculated on the net cash liability after deducting available Input Tax Credit (ITC), not on the full gross tax amount. A helpful resource is provided for further reading on GST payment rules.