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Interest on RCM

yash (accountant) (519 Points)

29 May 2020

RCM of March-20 paid in April-20. what is the rate of interest on this 9% or 18%. and how we calculate it?

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Pankaj Rawat (GST Practitioner) (55057 Points)
Replied 29 May 2020

As per Section 13(3) , the tax paid in respect of RCM is
(a) the date of payment as entered in book of Account of Recepeint or the date on which the payment is debited from bank account, whichever is earlier.
(b) the date immediately following 60 days from date of Issue of invoice by Supplier.
provided that it is not possible to determine by clause (a) & (b) then time of supply shall be the date of entry in book of Account of Recepeint.

Hence , if the payment is not made to supplier as per clause (a) , then Interest is not applicable as you got 60day grace to deposit the same.

now As per Notification 31/2020 CT, r/w circular 136/06/2020.The Nil rate of interest for first 15 days after the due date of filing return in form GSTR 3B & reduced rate of Intt. @ 9% thereafter has been notified for those Registered person whose aggregate turnover in Preceding FY is above 5Crore.

Now from above ,Interest is applicable only in case if the turnover of taxpayer is above 5crore & the march 2020 3B is filed after 5/5/2020.

Note : Taxpayer whose turnover is below 5Crore crore can file 3B for march without any nterest by 30/6/2020 & 3/7/2020.

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Himanshi Garg (Ca Article) (354 Points)
Replied 30 May 2020

Yes, I do agree with @ Pawan Rawat ji

yash (accountant) (519 Points)
Replied 30 May 2020

Invoice date:25.03.2020, payment date:31.03.2020 entry done in books: march-20. RCM not paid in the month of March -3B. Now we showing this in April-20 return. April-20 GST-3B want to file on 02.06.20. In this case what is the interesr Amount?

Himanshi Garg (Ca Article) (354 Points)
Replied 30 May 2020

As per my opinion, the due date to make payment of Tax liabilities is the due date of filing GSTR3B of the respective month.

So in case of Assessee having turnover above 5 crore, Interest would be paid for the period from the due date of filing of March GSTR3B and the date of filing of April GSTR3B @ 9%, if the GSTR3B of April has been filed on or before 24.06.2020.

If the assessee is having turnover upto 5 crore or upto 1.5 Crore, no Interest liability would arise if the Return of April, 2020 will be filed before 30th June, 2020 or 6th of July, 2020 as the case may be.

Thanks

Thanks