interest on tax liabilty set off from the credit ledger

[AMIT BATHAM]

Dear all my learned colleagues, I would like to hear your opinions on the following matter regarding interest liability: an outward supply that should be reported in both GSTR-3B and GSTR-1, but was accidentally left to be reported in GSTR-3B in the year 2017-2018, resulting in a shortfall in tax paid, will interest be owed on that liability if it is set off from the credit ledger? Section 50 stipulates that interest is payable on supplies made during the tax period and reported in the return for that period and return means accordance with the provision of Sec. 39 means GSTR-3B, interest shall be payable on that portion of the tax which is paid by debiting the cash ledger.

[Padmanathan KV]

Yes. prima face interest will be applicable on the entire tax paid which is being paid belatedly. Since the supply was not reported in GSTR-3B for the respective tax period in which the supply was made, it is not covered under proviso to section 50.

[Padmanathan KV]

Also see Issue Id: - 118832. The legal provisions, compensatory nature of interest etc has been discussed in this post by experts.

[AMIT BATHAM]

Dear Padmanathan Kollengode Sir Thank you sir

AI Summary

Interest Owed on Late Tax Payment Due to Reporting Omission in 2017-18, Clarified Under Section 50. A discussion on a tax forum addressed whether interest is owed on a tax liability set off from the credit ledger due to an omission in reporting an outward supply in GSTR-3B for the 2017-2018 period. A participant clarified that interest is applicable on the entire tax paid belatedly, as per Section 50, since the supply was not reported in the correct tax period. The discussion referenced legal provisions and the compensatory nature of interest, with a participant expressing gratitude for the clarification provided.