CA Intermediate · Taxation · Payment of Tax
Meera Enterprises, Jaipur, paid its GST for a month after the due date. The net tax liability, payable in cash, was Rs 2,00,000 and it was paid 20 days late. Interest is at 18% per annum on the delayed amount. What is the interest payable (use 365 days and round to the nearest rupee)?
The interest payable is Rs 1,973. It is computed on the Rs 2,00,000 of tax paid late at 18% per annum for 20 days, which is 2,00,000 x 18% x 20/365, equal to about Rs 1,972.6, rounded off to Rs 1,973.
- ARs 1,973Correct
- BRs 2,959
- CRs 1,479
- DRs 3,600
Explanation
Interest = 2,00,000 x 18% x 20/365 = 36,000 x 20/365 = 720,000/365 = Rs 1,972.6, rounded to Rs 1,973. Rs 3,600 results from using a 40-day period by mistake, and Rs 2,959 from using 30 days. Rs 1,479 results from using 15 days.
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