TaxTMI 
TaxTMI 
One of my client filed his GSTR-1 for the month of August 2021 within due date showing tax liability. There were on tax credit to be claimed for the said tax period and he paid entire tax by cash. However, in GSTR 3B filed for the said period, tax liability was shown as zero and the balance remained in cash ledger. Then after, the said cash balance was not utilized for the payment of tax in any tax period. After that we received notice in ASMT 10. So, on receipt of ASMT 10, DRC 03 was filed. The question is that since cash balance was not utilized till filing DRC 03, dealer is liable to pay interest upto filing of DRC 03 ?
Interest under Section 50 of CGST Act
30 Aug 2025 
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Interest under Section 50 CGST may be payable where tax remains unpaid despite electronic ledger credit; exceptions may apply.
Interest under Section 50 of the CGST Act is payable while tax remains unpaid, but amounts credited to the electronic cash ledger on or before the return due date and remaining there until debit may be excluded from interest under the proviso to Rule 88B. A contrary judicial view treats tax as unpaid until formally set off (for example by DRC adjustment), so interest would continue until such setoff is effected. Maintain ledger timing evidence to invoke the Rule 88B proviso. (AI Summary)
Interest under Section 50 of the CGST Act is payable while tax remains unpaid, but amounts credited to the electronic cash ledger on or before the return due date and remaining there until debit may be excluded from interest under the proviso to Rule 88B. A contrary judicial view treats tax as unpaid until formally set off (for example by DRC adjustment), so interest would continue until such setoff is effected. Maintain ledger timing evidence to invoke the Rule 88B proviso. (AI Summary)