CA Intermediate · Taxation · Returns
Kaveri Textiles, a registered person, did not file GSTR-3B for April by the due date and filed it 6 days late. It had a net tax liability of Rs 1,00,000 for the month. Assume interest at the prescribed rate of 18% p.a. is attracted on the net cash liability for the delay, and the 6 days are counted from the day after the due date to the date of filing inclusive. What is the interest payable (rounded to the nearest rupee)?
Interest for late payment is Rs 296. It equals Rs 1,00,000 multiplied by 18% and by 6/365, giving Rs 295.89, which rounds to Rs 296. Using a 360-day year or omitting the period proportion gives wrong figures.
- ARs 296Correct
- BRs 300
- CRs 18,000
- DRs 1,800
Explanation
Interest = 1,00,000 x 18% x 6/365 = 18,000 x 6/365 = 108,000/365 = Rs 295.89, rounded to Rs 296. Rs 300 results from using 360 days. Rs 1,800 wrongly uses 1/10 of a year, and Rs 18,000 ignores the time proportion.
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