New functionality added of Interest Calculator in GSTR-3B

Introducing Interest calculator in GSTR-3B

To facilitate taxpayers in doing self-assessment, the new functionality of the interest
calculator is being released in GSTR-3B. This functionality will assist taxpayers in
calculating the interest applicable for delayed filing of returns. Taxpayers will have to
verify and discharge the correct interest liability as per law, as payment of interest is
statutory compliance.

Interest computation

The interest computed by the system has been aligned with the Section-50 of the CGST
Act, 2017, as amended. Consequently, interest liability for respect of supplies made
during the tax period pertaining to the GSTR-3B being filed will be calculated only on
that portion of the tax which is paid by debiting the electronic cash ledger, i.e., the net tax
paid in cash. However, with respect to the supplies pertaining to the previous tax period(s) being declared in later GSTR-3B, the interest will be computed for the entire
liability.

Auto-population of system computed interest

Furnishing tax-period wise break-up in GSTR-3B: The return in FORM GSTR-3B
allows taxpayers to discharge tax liability for previous tax periods also, in addition to the
tax liability for the present period. However, the tax-period-wise break-up of the tax
liability is not available in GSTR-3B.

This new functionality will compute the interest applicable on the basis of the values
declared by the taxpayers in GSTR-3B for a particular tax period assuming that entire
liability belongs to that tax period. This system computed interest will be auto-populated
in Table-5.1 of GSTR-3B for the next tax period, the way it is done for the Late fees at
present.

The system computed interest values auto-populated in the next GSTR-3B return will be kept
editable. However, the system generated PDF of filed GSTR-3B will contain both values:
the System computed interest, and the user paid interest values.

To enable taxpayers to pay interest on supplies of past periods declared in a GSTR-3B, if
any, a new button has been added in GSTR-3B, called ‘Tax Liability Breakup, as
applicable’, and data is to be entered by clicking this button only by those taxpayers
who are making payment for liability pertaining to earlier tax-periods in the present
GSTR-3B. In cases where the present GSTR-3B consists of liability only for the present
period, the taxpayers can ignore this button, and continue filing their return as usual.

Changes in user experience

After the interest calculator is enabled on the GST Portal, there will be no change in the user
experience for the taxpayers. For those who have filed the previous return after the due date, the
interest would be auto-calculated and populated assuming that the entire liability pertained
to that tax period. The taxpayer would still have the facility to provide the break-up
of liability of the past period(s) to pay the correct interest using the ‘Tax
Liability Breakup, as applicable’ button. For details of declaring tax-period-wise tax
liability, please refer to the Annexure.

This facilitation measure is expected to assist the taxpayers by helping them with the calculation
of correct interest while filing of GSTR-3B and will thus improve ease in filing returns under
GST.

This functionality will be made available on the GST Portal shortly, and the same will be
intimated to the taxpayers. The details about functionality on the computation of the interest,
along with sample screenshots, are as per the Annexure.

Download Demo Screenshot of Interest calculator in GSTR-3B

Also Read:- Extended Due Date for GST Return Annual (GSTR 9/ 9C) for FY 2020-21

Also Read:- New IT Rules For 8AD on Computation of Capital Gain u/s 45(1B) of IT Act: CBDT Notifies

Also Read:- What Documents Required for GST Registration in 2021?

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