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GST Interest Calculator

Calculate interest on delayed GST payment under Section 50 of CGST Act. Instant calculation at 18% per annum with automatic date-based computation. Get accurate CGST, SGST, and IGST interest breakdown.

18% Per Annum
Section 50 CGST Act
Auto Date Calculation
No manual day counting
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Calculate GST Interest

Section 50: Interest is charged at 18% per annum on delayed GST payment from the due date to the date of actual payment.
Select which GST component interest to calculate
Enter the tax amount on which interest is payable
Or enter dates to auto-calculate delay period
Number of days tax payment was delayed

Understanding GST Interest: Complete Guide

GST interest is charged under Section 50 of the CGST Act, 2017 when taxpayers delay payment of GST beyond the due date. This interest is calculated at the rate of 18% per annum and is mandatory for all delayed tax payments, regardless of the reason for delay.

What is GST Interest (Section 50)?

Section 50 of the CGST Act mandates that if a registered person fails to pay GST by the due date, they must pay interest on the outstanding tax amount. This interest is calculated from the day following the due date until the date of actual payment.

Legal Provision: As per Section 50(1) of the CGST Act, "every person who is liable to pay tax in accordance with the provisions of this Act or the rules made thereunder, but fails to pay the tax or any part thereof to the Government within the period prescribed, shall for the period for which the tax or any part thereof remains unpaid, pay, on his own, interest at such rate, not exceeding eighteen per cent, as may be notified by the Government on the recommendations of the Council."

Current GST Interest Rate

Particulars Interest Rate Applicable On
Delayed GST Payment 18% per annum Tax amount (CGST, SGST, IGST)
Excess ITC Claimed (Refunded) 18% per annum Refunded amount
Delayed Refund by Department 6% per annum (simple interest) Refund amount
Tax Paid but Return Not Filed Nil (No interest) If tax paid on time

How to Calculate GST Interest?

GST interest calculation follows a simple formula based on the delayed tax amount, delay period, and interest rate:

Interest Formula:

Interest = (Tax Amount × 18% × Number of Days) ÷ 365

OR

Interest = Tax Amount × 0.18 × (Days ÷ 365)

Real-World Example Calculations

Example 1: CGST + SGST Interest (30 Days Delay)

Example 2: IGST Interest (60 Days Delay)

Example 3: Partial Payment Scenario (90 Days)

When is GST Interest Applicable?

How to Pay GST Interest?

  1. Log in to the GST Portal (www.gst.gov.in)
  2. Go to Services → Payments → Create Challan
  3. Select the tax period (month/quarter)
  4. Enter interest amount under:
    • Interest on CGST (Tax head: 7001)
    • Interest on SGST (Tax head: 7001)
    • Interest on IGST (Tax head: 7001)
  5. Generate challan and make payment
  6. Interest must be paid in CASH (not from credit ledger)
  7. File your GST return after payment

Important Note: Interest cannot be paid using Input Tax Credit (ITC). It must be paid in cash only through your electronic cash ledger. Interest should be calculated on a self-assessment basis and paid along with the delayed tax payment.

Interest vs Late Fee: Key Differences

Aspect Interest (Section 50) Late Fee (Section 47)
Applicable On Delayed tax payment Delayed return filing
Rate 18% per annum ₹50/day (or ₹20/day for nil returns)
Calculation Basis Tax amount × 18% × Days/365 Fixed per day amount
Maximum Cap No cap ₹5,000 maximum
If Tax Paid on Time No interest Late fee still applicable if return delayed

Common Scenarios and Interest Liability

Scenario 1: Tax Paid on Time, Return Filed Late

Scenario 2: Tax Paid Late, Return Filed on Time

Scenario 3: Both Tax and Return Delayed

Tips to Avoid Interest Liability

  1. Pay Tax Before Due Date: Always pay GST at least 2-3 days before the due date
  2. Maintain Cash Flow: Keep sufficient funds in your account for GST payment
  3. Set Reminders: Use calendar alerts for payment due dates
  4. Use Auto-Debit: Set up automatic payment if your bank supports it
  5. Regular Reconciliation: Match your books with GSTR-2A/2B monthly
  6. Correct Calculations: Ensure accurate tax calculation to avoid short payment
  7. Immediate Rectification: If you discover an error, pay immediately to minimize interest
  8. Professional Help: Engage a CA for complex scenarios

Can Interest be Waived?

Generally, interest under Section 50 cannot be waived as it is mandatory. However, in certain exceptional circumstances:

Frequently Asked Questions (FAQs)

The current GST interest rate is 18% per annum as per Section 50 of the CGST Act. This rate applies to all delayed GST payments including CGST, SGST, and IGST. The interest is calculated on a daily basis from the day after the due date until the date of actual payment.
GST interest is calculated using the formula: Interest = (Tax Amount × 18% × Number of Days) ÷ 365. For example, if you delay payment of ₹50,000 tax for 30 days, the interest would be: ₹50,000 × 0.18 × (30/365) = ₹739.73. The calculation is done separately for CGST, SGST, and IGST.
No, GST interest cannot be paid using Input Tax Credit (ITC). Interest under Section 50 must be paid in cash only through your electronic cash ledger. This is because interest is a penalty for delayed payment, not a tax liability. You can only use ITC to pay actual tax amounts (CGST, SGST, IGST).
No, if you pay the GST on time but file the return late, no interest is charged under Section 50. However, you will still be liable to pay late fees under Section 47 for delayed return filing. This is why it's crucial to at least ensure tax payment is done on time, even if return filing gets delayed.
GST interest (Section 50) is charged on delayed tax payment at 18% per annum with no cap, calculated on the tax amount. Late fee (Section 47) is charged for delayed return filing at ₹50 per day (or ₹20 for nil returns) with a maximum cap of ₹5,000. You can pay tax on time and avoid interest but still pay late fee if return is delayed, or vice versa.
No, there is no maximum limit or cap on GST interest under Section 50. The interest keeps accumulating at 18% per annum as long as the tax remains unpaid. This is unlike late fees which are capped at ₹5,000. Therefore, it's crucial to pay your GST as soon as possible to minimize interest liability.
GST interest should be paid on a self-assessment basis at the time of making the delayed tax payment. You should calculate the interest from the due date to the date of actual payment, and pay it through a challan on the GST portal before filing your return. The GST portal also auto-calculates interest when you file returns late.
Yes, GST interest is calculated separately for CGST, SGST, and IGST based on the respective delayed amounts. For intra-state supplies, you'll pay interest on both CGST and SGST amounts. For inter-state supplies, interest is calculated on the IGST amount. Each component attracts 18% per annum interest independently.
Generally, GST interest under Section 50 is mandatory and cannot be waived. However, the government occasionally announces amnesty schemes that provide relief on interest for specific periods. Also, if the delay was due to technical glitches on the GST portal (with proper proof), authorities may consider waiving interest. But these are exceptions, not the rule.
If you don't pay GST interest, it becomes an outstanding liability on your account. The department can initiate recovery proceedings, issue demand notices, and even impose additional penalties. Non-payment of interest can also lead to blocking of your ITC (Input Tax Credit) and may affect your GST compliance rating. It's always advisable to pay interest voluntarily to avoid further complications.

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