• Interest payable on late GST Deposit to be calculated on Total Tax Liability as filed in GSTR-3B

• Section 50(1) provides for the interest on delayed payment of tax interest liability, either through cash or through utilization of input tax credit (ITC). In other words, interest is required to be paid on total amount of tax liability as shown in Form GSTR 3B which has been paid belatedly.

50 (1) Every person who is liable to pay tax in accordance with the provisions of this Act or the rules made thereunder, but fails to pay the tax or any part thereof to the Government within the period prescribed, shall for the period for which the tax or any part thereof remains unpaid, pay, on his own, interest at such rate, not exceeding eighteen per cent, as may be notified by the Government on the recommendations of the Council: 

• Section 75 (12) provides that interest is payable on such delayed payment of GST and can be recovered under the provisions of section 79 of the CGST Act.

75 (12) Notwithstanding anything contained in section 73 or section 74, where any amount of self-assessed tax in accordance with a return furnished under section 39 remains unpaid, either wholly or partly, or any amount of interest payable on such tax remains unpaid, the same shall be recovered under the provisions of section 79.

Interest on delayed GST Payments under section 50 of CGST Act, 2017

• The GST laws, as of now, permit interest calculation on delayed GST payment on the basis of gross tax liability. This position has been upheld in the Telangana High Court’s decision dated 18.04.2019

• In spite of this position of law and Telangana High Court’s order, the Central Government and several State Governments, on the recommendations of GST Council in its 31st Meeting, amended their respective CGST/SGST Acts to charge interest on delayed GST payment on the basis of net tax liability. Such amendment will be made prospectively from a date yet to be notified.