TaxTMI 
TaxTMI 
If the total GST liability is 10 Lacs for Aug 2018, Eligible ITC availed is 7 Lacs, Balance challan paid on 25 Sept 2018 with interest calculated on 3 lacs for 5 days delay. Return filed on 25 Sep 2018. Whether interest to be calculated on full liability of 10 lacs or Challan payable amount of 3 lacs?
Interest calculation in GST
26 Sep 2018 
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Interest on delayed GST payment applies to full output tax until the liability is discharged by ledger credit.
The question is whether GST interest for delayed payment is chargeable on full output tax or only on net liability after input tax credit. Respondents rely on the rule that interest accrues on tax remaining unpaid and that payment is effected when the electronic liability register and ledgers are debited. One position treats failure to debit credit during the period as attracting interest on the full output tax until ledger discharge; an alternative argument is that available input credit reflected in ledgers negates loss to the treasury and thus the interest premise, a point potentially open to legal challenge. (AI Summary)
The question is whether GST interest for delayed payment is chargeable on full output tax or only on net liability after input tax credit. Respondents rely on the rule that interest accrues on tax remaining unpaid and that payment is effected when the electronic liability register and ledgers are debited. One position treats failure to debit credit during the period as attracting interest on the full output tax until ledger discharge; an alternative argument is that available input credit reflected in ledgers negates loss to the treasury and thus the interest premise, a point potentially open to legal challenge. (AI Summary)