GST Interest Calculator

GST Interest under Section 50 of the CGST Act, 2017 is the interest payable by a registered taxpayer on delayed payment of GST liability. When a taxpayer fails to pay the full or partial GST amount by the due date, interest is levied at 18% per annum on the outstanding tax amount. For taxpayers who claim excess Input Tax Credit (ITC) beyond what is rightfully due, the interest rate is 24% per annum. This provision ensures timely compliance and discourages delay in GST payments.

GST interest is calculated on the outstanding tax amount from the day after the due date until the actual date of payment. The formula is: Interest = Outstanding Tax × Interest Rate × Number of Days ÷ 365. For example, if ₹1,00,000 GST is paid 30 days late at 18% per annum, the interest would be ₹1,00,000 × 18% × 30 ÷ 365 = ₹1,479. Our GST Interest Calculator computes this automatically, saving you from manual errors and ensuring accurate interest liability determination.

GST interest and GST late fee are two separate penalties for non-compliance. GST interest (Section 50) is charged at 18% per annum on the unpaid tax amount and varies based on the outstanding amount and delay period. GST late fee (Section 47) is a fixed daily penalty for late filing of returns: ₹50 per day (₹25 CGST + ₹25 SGST) for regular returns and ₹20 per day for nil returns. Both can apply simultaneously — interest on unpaid tax plus late fee for delayed return filing.

GST interest starts accruing from the day immediately after the due date of payment until the date of actual payment. For GSTR-3B, the due date is typically the 20th of the following month (or 22nd/24th for certain categories). For example, if January GSTR-3B is due on February 20th and the tax is paid on March 15th, interest accrues from February 21st to March 15th (23 days). It is important to note that interest applies even if you file the return on time but pay the tax later.

No, GST interest under Section 50 is not applicable for late filing of GSTR-1, as GSTR-1 is a return that reports outward supplies and does not involve tax payment. However, late filing of GSTR-1 attracts a late fee under Section 47. GST interest is only applicable when there is a delay in payment of tax, such as through GSTR-3B. Consistent late filing of GSTR-1 can also lead to restrictions on filing future returns and impact the buyer's ability to claim Input Tax Credit.

When a taxpayer claims excess Input Tax Credit (ITC) beyond what is rightfully eligible, interest is charged at a higher rate of 24% per annum on the excess ITC amount claimed. This is higher than the standard 18% rate for delayed tax payment, reflecting the more serious nature of wrongfully claiming ITC. The interest is calculated from the date the excess ITC was credited in the electronic credit ledger until the date it is reversed or paid. Taxpayers must carefully reconcile ITC claims to avoid this penalty.

GST interest is mandatory and cannot be waived by any GST authority, as it is a statutory levy under Section 50 of the CGST Act. Unlike late fees, which can be reduced or waived through notifications or circulars (e.g., during COVID-19 relief), interest continues to accrue on outstanding tax amounts. The only exception is if a taxpayer wins an appeal or litigation where the tax demand itself is set aside. Therefore, it is always advisable to pay GST dues on time to avoid interest accumulation.

Using the GST Interest Calculator is simple: (1) Enter the outstanding GST tax amount that was paid late, (2) Select the applicable interest rate — 18% for delayed payment or 24% for excess ITC claim, (3) Enter the due date and the actual payment date, (4) The calculator instantly computes the total interest liability along with the number of days of delay. This tool is useful for businesses, Chartered Accountants, and tax professionals to accurately determine interest obligations before filing GST returns.