CA Intermediate · Taxation · Returns
Ramesh & Co. files GSTR-3B monthly. Its net cash tax liability for a month was Rs 1,00,000, of which the entire amount was paid late by 10 days. Assume the tax is an intra-State supply paid in cash and interest on delayed payment is charged at 18% per annum on the tax payable in cash. Ignore late fee. What is the interest payable (nearest rupee, 365-day year)?
Interest is Rs 493. Interest on delayed payment of tax is charged at 18% per annum for the days of delay, so 1,00,000 multiplied by 18% and by 10/365 comes to about Rs 493.15, rounded to Rs 493.
- ARs 493Correct
- BRs 740
- CRs 1,800
- DRs 986
Explanation
Interest = 1,00,000 x 18% x 10/365 = 18,000 x 10/365 = 180,000/365 = Rs 493.15, i.e. Rs 493. Rs 986 results from using 20 days. Rs 1,800 ignores the proration for days and gives a month-like figure. Rs 740 uses 15 days.
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