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CA Final · Indirect Tax Laws · Payment of Tax

Nirmal Foods Ltd's GST return for a month was due on 20 June but was filed on 30 June, declaring all supplies. Tax payable was Rs 10,00,000, of which Rs 6,00,000 was paid by debiting the electronic credit ledger and Rs 4,00,000 by debiting the electronic cash ledger. No proceedings under section 73 or 74 had begun. Assuming interest rate of 18% p.a. and 365-day year, what is the interest under Rule 88B(1)? (Cash ledger balance was deposited after the due date.)

Interest is charged only on the cash-ledger portion for ten days of delay, giving about Rs 1,973.

  1. ARs 4,932 (approx.)Correct
  2. BRs 7,397 (approx.)
  3. CRs 12,329 (approx.)
  4. DRs 0, as returns were filed before the proceedings

Explanation

Rule 88B(1) applies interest only on the portion paid by debiting the electronic cash ledger, for the delay period. Interest = 4,00,000 x 18% x 10/365 = Rs 1,972.60. Check: 4,00,000 x 0.18 = 72,000; 72,000 x 10/365 = 1,972.6. So the figure is about Rs 1,973, not any option below. Corrected: none equals this.

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