Returns and Payment of Taxes: formula sheet

Key formulas

Interest on delayed payment of tax (general case)

Interest = Unpaid tax × Rate ÷ 100 × Days of delay ÷ 365

Rate is as notified under section 50(1), capped by the Act at 18% a year. Under Rule 88B(2), count from the date the tax was due until the date it is paid. Section 50(2) says interest runs from the day succeeding the due date. Use the rate given in the question.

Interest where the return is filed late (Rule 88B(1))

Interest = Tax paid by debiting the electronic cash ledger × Rate ÷ 100 × Days of delay in filing ÷ 365

Applies where supplies of the period are declared in a late return, and the return is not filed after proceedings under section 73, 74 or 74A have begun for that period. Tax paid through ITC is left out. Cash that was credited to the ledger on or before the due date and lay there until debited on filing is also left out.

Interest on ITC wrongly availed and utilised

Interest = ITC wrongly availed and utilised × Rate ÷ 100 × Days from utilisation to reversal or payment ÷ 365

Section 50(3) caps the rate at 24% a year, as notified. Under Rule 88B(3), the period runs from the date of utilisation to the date of reversal or payment.

When ITC is treated as utilised (Rule 88B(3) Explanation)

Utilised only when credit ledger balance falls below the wrongly availed ITC; extent = the shortfall

If the fall is due to payment of tax through the return, the date is the earlier of the return due date and the actual filing date. In all other cases it is the date of debit to the credit ledger.

What each ledger can pay

Credit ledger: tax only. Cash ledger: tax, interest, penalty, late fee, other dues

ITC cannot pay interest, penalty or late fee.

Order of using ITC

IGST credit → IGST, CGST, SGST/UTGST. CGST credit → CGST, IGST. SGST/UTGST credit → SGST/UTGST, IGST

No cross-use between CGST and SGST/UTGST.

Due date for outward supply details

On or before the 10th day of the month succeeding the tax period

Section 37(1). The Commissioner may extend it by notification for a class of taxable persons, for reasons recorded in writing.

Who is outside section 37(1)

ISD, non-resident taxable person, person under section 10, 51 or 52

They do not furnish GSTR-1 under this sub-section.

Contents of 'details of outward supplies'

Invoices + debit notes + credit notes + revised invoices

Explanation to section 37.

Rectification of errors

Rectify the error in the prescribed manner; pay short-paid tax and interest in the return for the tax period to which the original details relate; not allowed after 30 November following the end of the financial year, or the annual return, whichever is earlier

Section 37(3) with its proviso. The Act says tax and interest are paid 'in the return to be furnished for such tax period', that is, the tax period for which the details were furnished.

Sequential filing rule

No filing for a tax period if any earlier period's details are unfiled

Section 37(4). Government may relax by notification.

Three-year limit

No filing after 3 years from the due date

Section 37(5). Government may allow later filing by notification.

Recipient's statements

GSTR-2A = details made available in parts; GSTR-2B = auto-generated monthly ITC statement

Rule 60(1) to (8).

CMP-08 (composition statement)

Quarterly; due by the 18th day of the month after the quarter

Contains details of payment of self-assessed tax. Tax is paid by debiting the electronic cash ledger.

GSTR-4 (composition annual return)

Yearly; due 30 April after the financial year (30 June from FY 2024-25 onwards)

Includes invoice-wise inward supplies and consolidated outward supplies.

Late fee for returns under sections 37, 39, 45 and 52 (section 47(1))

₹100 per day of failure, maximum ₹5,000

Applies when the details or return are not furnished by the due date.

Late fee for annual return under section 44 (section 47(2))

₹100 per day, maximum 0.25% of turnover in the State or Union territory

The cap is a quarter per cent of turnover, not a fixed amount.

Withdrawal from composition (Rule 62(5))

CMP-08 for the period of composition by the 18th of the month after the quarter of withdrawal; GSTR-4 for that period by 30 April after the financial year of withdrawal

Applies whether the withdrawal is by choice or by the proper officer.

Assessment of non-filers (section 62 of the Act)

Order within 5 years from the annual return due date; valid return within 60 days of the order deems it withdrawn

A further 60 days is allowed on an additional late fee of ₹100 per day beyond the first 60 days. Interest and late fee still continue.

Annual return due date

GSTR-9 due date = 31 December after the end of the financial year

Section 44 CGST Act. The due date can be extended by notification, so use the date given in the question.

GSTR-9C applicability

Aggregate turnover in the financial year > ₹5 crore

Filed with GSTR-9 as a self-certified reconciliation statement. Turnover of exactly ₹5 crore is not covered.

Optional GSTR-9

Aggregate turnover ≤ ₹2 crore: filing optional by notification

Applies year by year through notifications. Treat it as optional only when the question says so or the turnover is within the limit.

GSTR-10 due date

Later of (date of cancellation, date of cancellation order) + 3 months

Section 45 with Rule 81. Take the later date first, then add three months.

Late fee on GSTR-9 (statutory)

₹100 per day (CGST) + ₹100 per day (SGST) = ₹200 per day; cap = 0.25% + 0.25% of turnover in the State/UT

Section 47. Late fee = lower of (days of delay × daily rate) and the cap. Use notified reduced rates if the question states them.

Notice before assessment

Section 46 notice → return to be filed within 15 days

Section 62 applies only if the return is still not filed after the notice.

Basis of assessment

Best judgment on relevant material available or gathered by the proper officer

Applies to a registered person who fails to furnish the return after the section 46 notice.

Order and recovery summary

Assessment order in FORM GST ASMT-13; summary in FORM GST DRC-07

Order is issued by the proper officer.

Withdrawal (section 62(2))

Valid return furnished within 30 days of the order → order deemed withdrawn

Interest under section 50(1) and late fee under section 47 remain payable.

Maximum number of instalments (section 80)

Instalments ≤ 24 monthly instalments

Instalments are monthly. The Commissioner decides the number, up to twenty-four, under Rule 158(2).

Amounts excluded from the facility (section 80)

Liability self-assessed in any return → no instalments

The facility applies to other amounts due under the Act, not to tax you self-assessed in a return.

Application and order (Rule 158(1) and (2))

Application: FORM GST DRC-20 (electronic) → Order: FORM GST DRC-21

Before the order, the Commissioner calls for a report from the jurisdictional officer on financial ability to pay.

Facility not allowed (Rule 158(3))

(a) recovery process on for an existing default; (b) instalments not allowed in the preceding financial year; (c) amount sought < ₹25,000

Any one of the three is enough to refuse. The default in (a) can be under CGST, IGST, UTGST or any State GST Act. Condition (b) as worded in the Rules is 'has Not been allowed to make payment in instalments in the preceding financial year'; quote the Rule text in the exam.

Interest

Interest under section 50 is payable on the amount allowed in instalments

Instalment relief does not waive interest.

Default consequence (proviso to section 80)

One instalment missed → whole outstanding balance due forthwith and recoverable without further notice

No notice is required before recovery starts.

TDS rate (CGST Act)

TDS (central tax) = 1% × payment made or credited to the supplier

Applies where the contract value exceeds ₹2,50,000, excluding taxes shown in the invoice. This is the 1% under section 51 of the CGST Act. For an intra-State supply a matching 1% State tax applies under the State law, making 2% in total. For integrated tax, the section 20 proviso of the IGST Act sets 2%.

TDS threshold

Total value of supply under a contract > ₹2,50,000

Exceeds, not 'equals or exceeds'. Value excludes CGST, SGST, UTGST, IGST and cess.

TDS exception (central tax)

No deduction under section 51 if supplier location and place of supply are in a State/UT different from the recipient's State/UT of registration

This proviso governs the CGST deduction under section 51(1). It does not remove TDS on inter-State supplies altogether; integrated tax TDS at 2% is dealt with through section 20 of the IGST Act.

TCS base

Net value of taxable supplies = taxable supplies through the operator in the month − supplies returned in the month

Excludes services notified under section 9(5), where the operator itself pays tax.

TCS rate

Not exceeding 1% (CGST); not exceeding 2% (IGST), as notified

Exact rate is fixed by notification.

Payment due date (TDS and TCS)

Within 10 days after the end of the month of deduction or collection

Section 51(2) and section 52(3).

TCS statement

Monthly statement within 10 days after month-end, subject to extension by the Commissioner; annual statement before 31 December following the financial year

Section 52(4) and (5). The provisos let the Commissioner extend the time limit by notification. The form and manner are prescribed by the rules.

Late payment by deductor

Interest under section 50(1) in addition to tax deducted

Section 51(6).

Quick revision

• Tax is paid through electronic ledgers: the cash ledger, credit ledger and liability register each have a defined role.
• Know which ledger can pay which tax; credit cannot be used for everything, so revise the utilisation rules.
• Interest on late payment runs from the day after the due date until payment, and applies on the tax actually unpaid.
• Returns are built from outward and inward supply details, so mismatches between them cause problems.
• Match each return to its filer: regular taxpayer, composition taxpayer, non-resident, input service distributor, TDS or TCS deductor.
• Late fee depends on the return and the number of days of delay, so learn the amounts for your material.
• Annual return and final return serve different purposes: one for the year, one on cancellation of registration.
• A non-filer can be assessed by the officer on best judgment after notice.
• Instalment facility and recovery apply to tax already due, so know who can allow it and the recovery modes.
• TDS is deducted by the payer; TCS is collected by the seller or specified person, and both must be deposited by the due date.
• For income-tax questions use the Income-tax Act, 2025 and the term tax year, never assessment year.

Common mistakes

• Using ITC to pay interest, penalty or late fee. Fix: Remember that ITC pays only tax. Every interest, penalty and fee amount goes to the cash ledger.
• Using CGST credit to pay SGST/UTGST, or the reverse. Fix: Draw a small grid. CGST credit pays CGST then IGST. SGST/UTGST credit pays SGST/UTGST then IGST. Never cross the two.
• Saying GSTR-1 and GSTR-3B are the same Fix: GSTR-1 gives invoice-level details of outward supplies under section 37. GSTR-3B is the summary return for payment of tax. Keep their purposes separate.
• Treating GSTR-2A and GSTR-2B as identical Fix: GSTR-2A is shown in parts and updates as data arrives. GSTR-2B is an auto-generated monthly statement built from set cut-off dates under rule 60(7).
• Saying a composition taxpayer files a monthly return. Fix: Remember the pair: CMP-08 quarterly, GSTR-4 annual.
• Using 30 April as the GSTR-4 due date for every year. Fix: For FY 2024-25 onwards, the due date is 30 June following the financial year.
• Saying GSTR-9C needs a certificate from a CA or CMA. Fix: Write that GSTR-9C is now a self-certified reconciliation statement by the taxpayer, required where aggregate turnover exceeds ₹5 crore.
• Treating GSTR-9 as compulsory for every registered person. Fix: Exclude ISD, TDS/TCS deductors, casual and non-resident taxable persons. Mark GSTR-9 as optional where turnover is up to ₹2 crore and the notification applies.
• Applying section 62 without a section 46 notice. Fix: Always state the notice first. Section 62 applies only if the return remains unfiled after the notice.
• Mixing up the 15-day and 30-day periods. Fix: 15 days run from the notice. 30 days run from the assessment order.

Exam tips

• In MCQs, watch the word 'only'. ITC pays tax only. Interest, penalty and late fee need cash.
• Always write the rule you apply: Rule 88B(1), (2) or (3), and section 50(1) or (3). It earns step marks even if arithmetic slips.
• Show a small table of heads, ITC used and cash payable. It keeps IGST, CGST and SGST sorted and is easy to mark.
• Read the dates carefully. Interest starts the day after the due date. Count days by month and show the count.
• Use the rate stated in the question. If none is given, say the rate is as notified, not exceeding 18% for section 50(1) and 24% for section 50(3).
• Learn the section 37(1) exclusions as a list. MCQs often ask who is not covered.
• Write 'tenth day of the month succeeding the tax period' exactly in descriptive answers.
• For differences, use two columns of points: purpose, nature, timing. Give 3 to 4 points for 14 marks.