Penalties Section 50 CGST — Interest on Late Payment of GST
Section 50 CGST — Interest on Late Payment of GST
Central Goods and Services Tax Act 2017 — 50
18% per annum (simple) on net GST liability paid late. Post-2021 amendment: interest applies only on net cash liability (not on ITC available in ledger).
The Penalty
18% per annum (simple interest) on net cash liability
- Cap
- None
- Calculation base
- Net GST payable in cash (gross GST minus eligible ITC available in electronic credit ledger) — as amended by Finance Act 2021 with retrospective effect
- Period
- From the day after due date of GSTR-3B until actual date of payment of tax
When does this apply?
GSTR-3B tax payment made after due date (20th of following month, or as notified)
Calculate this amount
This estimate applies only the rate and caps published in the authored rule for this page.
₹1,479₹1,00,000 × 18% ÷ 365 × 30 days
Worked examples
| Scenario | Calculation | Result |
|---|---|---|
| Net cash liability ₹50,000 paid 30 days late | ₹50,000 × 18% ÷ 365 × 30 = ₹739 | ₹739 |
| Net cash liability ₹2,00,000 paid 60 days late | ₹2,00,000 × 18% ÷ 365 × 60 = ₹5,918 | ₹5,918 |
How it is levied
System-computed and displayed in GSTR-3B next return as interest payable. AO can also raise demand.
⚠ VERIFY
Whether s.50 interest at 18% applies on the full tax or only on net cash: the 2021 amendment confirmed interest applies only on net cash liability (actual shortfall paid by cash after adjusting available ITC). Confirm with GST practitioner for cases where ITC eligibility is disputed.