Interest on delayed payment of tax [Section 50]

Interest on delayed tax payments increases taxpayer liability and applies to unpaid tax and wrongly availed input credits.

Section 50 mandates interest on delayed tax payments and on wrongly availed input tax credit. Interest on belated tax is charged on the portion debited from the electronic cash ledger where returns are filed late, excluding amounts that remained in the cash ledger from the due date until debit. Interest on wrongly availed credit is calculated on the amount utilised from the date of utilisation-determined by electronic credit ledger balances and return filing rules-until reversal or payment. Interest liabilities are debited to the electronic tax liability register and payable from the electronic cash ledger; voluntary payment of tax and interest can conclude proceedings and avoid penalty.