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CA Intermediate · Taxation · Returns

Kaveri Enterprises, Pune, filed its GSTR-3B for a month on time with tax payable of Rs 80,000, but paid the tax only after delay of some days. Which statement about the consequence under the CGST Act, 2017 is correct?

Interest is payable on the tax paid late for the period of delay at the prescribed rate. Filing the return on time does not excuse late payment of tax. Late fee is linked to delayed filing of returns, not delayed payment, and no automatic cancellation follows.

  1. AInterest is payable on the tax paid late, for the period of delay, at the prescribed rateCorrect
  2. BNo interest is payable because the return was filed on time
  3. COnly a late fee is payable and no interest arises
  4. DThe registration is cancelled automatically

Explanation

Interest under the CGST Act is payable by a person who fails to pay tax by the due date, for the period of delay, at the notified rate. Timely filing of the return does not remove the liability to pay interest on late payment of tax. Late fee relates to delay in filing the return, not payment. Automatic cancellation is not the consequence.

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