Page 12 - Ch9_POT & TDS-TCS

Answer:
Ü As per section 50 of CGST Act, 2017, Interest is payable on delayed payment of tax at the rate 18% from the

day succeeding the due date of payment till the date of payment.
Ü As per proviso to section 50, the interest is payable on net tax payable when the return is not furnished
within due date and also payment is not made within due date.
Ü Such interest is payable on that portion of tax which is paid by debiting the electronic cash ledger.

Ü Therefore, Interest is payable on net tax payable, if there is default in payment of tax and filing of returns.

CCP 09.10.18.00
ABC Ltd. have filed their GSTR-3B for the month of July 20XX within the due date prescribed under

Section 39 i.e. 20.08.20XX. Post filing of the return, the registered person has noticed during
September 20XX that tax dues of ₹ 40,000 for the month of July 20XX have not been paid. ABC Ltd., has
paid the above amount of ₹ 40,000 through GSTR-3B of September 20XX, filed on 20.10.20XX
[payment through Cash ledger - ₹ 30,000 & Credit ledger ₹ 10,000]. Examine the Interest payable

under the CGST Act, 2017.
What would be your answer if, GSTR-3B for the month of July 20XX has been filed belatedly on
20.10.20XX and the self-assessed tax of ₹ 40,000 has been paid on 20.10.20XX [payment through
electronic cash ledger - ₹ 30,000 and electronic credit ledger ₹ 10,000]

Notes:
1) No other supply has been made nor tax payable for the month of July 20XX other than ₹ 40,000
missed out to be paid on forward charge basis
2) Ignore the effect of leap year, if applicable in this case.

[Study Mat (Example)], [CA Inter Dec 21 (Similar)]
Answer :-
Legal Provision:
Ü As per section 50 of the CGST Act, 2017, Interest is payable on delayed payment of tax at the rate 18% from

the day succeeding the due date of payment till the date of payment.
Ü As per proviso to section 50, the interest on tax payable in respect of supplies made during a tax period and
declared in the return for the said period furnished after the due date is payable on the net tax liability
paid through electronic cash ledger.

Discussion & Conclusion:
Ü In the given case, ABC Ltd., has defaulted in making the payment for ₹ 40,000 on self-assessment basis in
the return for the month of July 20XX.
Ü Accordingly, interest is payable on the gross liability and proviso of sub-section 50(1) shall not be

applicable.
Ü Thus, the amount of interest payable by ABC Ltd. is as under:
Period of delay = 21st August 20XX to 20th October 20XX = 61 days
Hence, Interest = ₹ 40,000 x 18% x 61/365 = ₹ 1,203
Ü In the second case, if ABC Ltd., have filed the return for the month of July 20XX on 20.10.20XX, beyond the

stipulated due date of 20.08.20XX and if the self-assessed tax for July 20XX has been paid on 20.10.20XX,
Interest under proviso to Section 50(1) shall be payable on the tax paid through Electronic Cash Ledger only.
Ü Hence Interest is payable from 21st August 20XX till 20th October 20XX = 61 days.

Interest = ₹ 30,000 x 18% x 61/365 = ₹ 902

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