Demand of Interest when payment is discharged on due date.

[SANJEEV JADHAV]

Dear Experts, We have discharged our GST payment liability on due date but their is some minor delay in submission of GSTR-3B returns. Whether we require to pay interest.

[KASTURI SETHI]

Sh.Sanjeev Jadhav Ji,

When liability has been set off on due date, no interest is required to be paid. Interest is always compensatory in nature. You are required to deposit late fee, if the same is required by Common Portal System. The portal will not allow to proceed without late fee, if due.

[Shilpi Jain]

The GST system is so designed that mere paying the challan would not be considered as payment of taxes to the Government as was under the earlier tax regimes. The department looks at the date of filing of the GSTR-3B as the date of payment of taxes. So you could get a query from the department for payment of the interest on the cash component of the taxes paid.

However, as Kasturi sir has mentioned since interest is compensatory in nature it should not be levied merely for late filing of GSTR-3B. Though this will have to come from the Courts for any relief to come to the assessees

[DR.MARIAPPAN GOVINDARAJAN]

I endorse the views of Kasthuri sir

[SANJEEV JADHAV]

Dear All Experts, Thank you very much for your valuable suggestion.

[KASTURI SETHI]

I agree with Madam Shilpi Jain to a T. I further add that as per query GSTR 3B return has been filed late. It means tax stands transferred to Govt. account on the date of filing return. Liability was set off late. Interest will have to be paid for the period of delay. (may be in the next return).

[Mr Rao]

Dear sir,

I agree with all the experts. By depositing amount through challan, your Electronic Cash Ledger will be credited to that extent. Only when you file the return, the tax liability will be debited from your cash ledger and credited to the Government exchequer. Accordingly, the date of filing the return is crucial for determining the interest aspect.

[Ganeshan Kalyani]

Here is a gap kept by Govt. that amount being paid by taxpayer into Govt. account i.e. Electronic Cash Ledger. This should suffice payment of tax as done. But law says when return is filed by offsetting the liability with cash in electronic cash ledger the tax is actually paid. The reason for one day delay may be technical glitches at GSTN and for that taxpayer has to pay interest. As said by Madam Shilpi the departement issues notices asking interest.

AI Summary

Interest on delayed tax payment: filing date may determine payment date, potentially triggering interest despite timely challan.
Whether interest is payable where the challan was deposited on the due date but GSTR-3B was filed late: one position treats the cash deposit into the Electronic Cash Ledger on the due date as discharge of liability and hence no interest, subject only to any portal-imposed late fee; the opposing position holds that tax is debited and deemed paid only on filing the return, so interest for the delay is chargeable, and departmental notices may be issued, with judicial relief required to alter that outcome.