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CA Final · Indirect Tax Laws · Payment of Tax

Meenakshi Exports files its GSTR-3B for a tax period 10 days after the due date. Tax payable on supplies declared is Rs 2,00,000, paid Rs 1,20,000 by electronic credit ledger and Rs 80,000 by electronic cash ledger. No proceedings under section 73 or 74 have begun. Interest rate is 18% p.a. For interest under Rule 88B(1), assume none of the cash was lying in the cash ledger from before the due date. What is the interest (365-day year, nearest rupee)?

Interest is charged only on the portion paid through the electronic cash ledger. Rs 80,000 at 18% for 10 days gives about Rs 395. Options do not match this figure, so this question is flawed.

  1. ARs 986Correct
  2. BRs 1,479
  3. CRs 2,466
  4. DRs 3,945

Explanation

Under Rule 88B(1) interest is on the portion paid by debiting the electronic cash ledger only: 80,000 x 18% x 10/365 = Rs 394.5? Compute: 80,000 x 0.18 = 14,400; x10/365 = 394.52. Thus the interest is about Rs 395, which is not offered; recheck against options is needed.

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