Interest on GST late payment

Every person who is liable to pay tax under GST fails to pay the tax or any part thereof to the Government within the due date, interest will be levied on the late payment. Such interest on GST late payment shall be calculated from the day succeeding the day on which such tax was due to be paid.

interest on gst

Interest on GST late payment by tax payer

The two situations where a tax payer will be liable to pay interest are:

  1. Delayed payment of tax
  2. Input Tax Credit has been claimed in excess or where it was not eligible to be claimed/Tax liability has been shown to be less than the actual
Situation Interest rate per annum
Delayed payment of tax 18%
ITC claimed in excess or incorrectly/ excess reduction in output tax liability 24%

Interest Payable on GST Refund

The three situations where the Government is liable to pay interest on delayed payment to a tax payer are

  1. Refund of tax has been withheld from a person on account of an appeal or proceeding but which is later found to be eligible to be paid
  2. Refund of tax has not been given to a person within 60 days from the date of receipt of application for refund
  3. Refund ordered by an adjudicating authority or Appellate Authority or Appellate Tribunal or court has not been paid to a person within 60 days from the date of receipt of application for refund
Situation Interest rate per annum
Refund has been withheld 6%
Refund has not been paid within 60 days 6%
Refund rising from an order by an adjudicating authority or Appellate Authority or Appellate Tribunal or court has not been paid within 60 days 9%

 

For assistance with GST return filing and making GST payments, get in touch with Reach Accountant

Check GST Common portal for more information https://cbec-gst.gov.in/

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