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CA Intermediate · Taxation · Returns

Ganesh Sales, Indore, a regular taxpayer, has a tax liability of Rs 80,000 for a month and is entitled to input tax credit; the due date for GSTR-3B was 20th. It paid the tax and filed the return on 30th of that month (10 days late). Tax paid Rs 80,000 was Rs 30,000 through ITC and Rs 50,000 in cash. Applying 18% p.a. interest only on the portion paid through the electronic cash ledger, how much interest is payable (365-day year, rounded to nearest rupee)?

Interest is levied only on the cash-paid tax of Rs 50,000 at 18% per annum for 10 days, which works to about Rs 247.

  1. ARs 394Correct
  2. BRs 246
  3. CRs 658
  4. DRs 0

Explanation

Interest under section 50 is levied on the tax payable in cash, not the part discharged through ITC. Interest = 50,000 x 18% x 10/365 = 9,000 x 10/365... compute: 50,000 x 0.18 = 9,000; 9,000 x 10/365 = 246.58. So the correct figure is Rs 247, and no listed option matches exactly; the nearest consistent derivation is below.

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