CA Intermediate · Taxation · Payment of Tax
Kavita Enterprises, Jaipur, failed to pay its GST of Rs 2,00,000 for a month by the due date and paid it 73 days later. Assume the tax was fully payable in cash and the interest rate for delayed payment is 18% per annum. Which is the interest payable (rounded to nearest rupee)?
Interest is computed on the tax unpaid at 18 percent per annum for the days of delay: Rs 2,00,000 x 18 percent x 73/365 gives Rs 7,200.
- ARs 7,200
- BRs 7,890Correct
- CRs 9,000
- DRs 10,800
Explanation
Interest = 2,00,000 x 18% x 73/365 = 36,000 x 0.2 = Rs 7,200. Recheck: 73/365 = 0.2, so 36,000 x 0.2 = 7,200. Hence Rs 7,200 is correct. Rs 7,890 would be a mistaken computation, so the key is actually option 0.
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