Introducing Interest Calculator
- The new interest calculator functionality in GSTR-3B is being launched to help taxpayers with self-assessment. This feature will help taxpayers figure out how much interest they’ll have to pay if they file their returns late. Taxpayers will be required to verify and discharge the right interest liability in accordance with the law, as payment of interest is statutory compliance.
- The interest computed by the system has been aligned with Section-50 of the CGST Act, 2017, as amended. As a result, interest liability for supplies made within the tax period covered by the GSTR-3B will be computed only on the portion of the tax paid by debiting the electronic cash ledger, i.e., the net tax paid in cash. However, interest will be computed for the whole liability for supplies made during the preceding tax period(s) and stated in a later GSTR-3B.
Auto-population Of System Computed Interest
- Furnishing tax-period wise break-up in GSTR-3B: In addition to the tax liability for the current period, the return in FORM GSTR-3B allows taxpayers to discharge tax liability for past tax periods. GSTR-3B, on the other hand, does not provide a tax-period-by-tax-period breakdown of the tax liability.
- This new functionality will compute the interest applicable based on the values declared by the taxpayers in GSTR-3B for a particular tax period assuming that the entire liability belongs to that tax period. This system computed interest will be auto-populated in Table-5.1 of GSTR-3B for the next tax period, the way it is done for the Late fees at present.
5. The system computed interest values auto-populated in the next GSTR-3B return will be kept editable. However, the system-generated PDF of filed GSTR-3B will contain both values: the System computed interest, and the user paid interest values.
6. To enable taxpayers to pay interest on supplies of past periods declared in a GSTR-3B, if any, a new button has been added in GSTR-3B, called ‘Tax Liability Breakup, as applicable’, and data is to be entered by clicking this button only by those taxpayers who are making payment for liability about earlier tax-periods in the present GSTR-3B. In cases where the present GSTR-3B consists of liability only for the present period, the taxpayers can ignore this button, and continue filing their return as usual.
Changes in user experience
7. There would be no change in the user experience for taxpayers once the interest calculator is enabled on the GST Portal. The interest would be auto-calculated and populated for those who filed their previous return after the due date, presuming that the whole liability is related to that tax period. The taxpayer would still be able to use the ‘Tax Liability Breakup, where appropriate’ button to submit the break-up of liability for the previous period(s) to pay the right interest. Please see the Annexure for more information on declaring tax liability by tax period.
8. This facilitation calculation is expected to assist the taxpayers by helping them with the calculation of correct interest while filing of GSTR-3B and will thus enhance ease in filing returns under GST.
9. This functionality will be made available on the GST Portal shortly, and the same will be intimated to the taxpayers. The details about functionality on the computation of the interest, along with sample screenshots, are as per the Annexure.