Section 50(1) & 50(3), CGST Act 2017

Interest on late GST payment under Section 50

Pay your GST after the due date and interest runs at 18% per annum — but only on the net cash portion of the liability. Here's how Section 50 actually works.

Section 50(1): interest on delayed payment

A person who pays tax after the due date is liable to interest at 18% per annum for the period of delay. By the proviso to Section 50(1), interest is charged only on the portion of tax paid by debiting the electronic cash ledger — i.e. the net cash liability, not the gross — provided the GSTR-3B is filed after the due date (and proceedings under Section 73/74 have not been initiated).

Section 50(3): interest on wrongly availed ITC

Where input tax credit has been wrongly availed and utilised, interest applies at 18% per annum (reduced from 24% retrospectively from 1 July 2017). ITC merely availed but not utilised does not attract Section 50(3) interest.

How interest is computed

• Rate: 18% p.a. (both 50(1) and 50(3)).
• Period: from the day after the due date until the date of payment.
• Base: net cash tax liability (50(1)); ITC wrongly availed and utilised (50(3)).

Worked example

Net cash liability of ₹1,00,000 paid 30 days late: interest = ₹1,00,000 × 18% × 30/365 ≈ ₹1,479.

How GSTBuddies computes it

Upload your GSTR-3B and GSTBuddies reads the actual filing date, isolates the net cash liability, and computes Section 50 interest to the day — cited to the Act, no manual day-count. See the full compliance suite or GSTR-9 late fee.

FAQ

Is GST interest on gross or net liability?

On the net cash liability — the proviso to Section 50(1) charges interest only on the tax paid by debiting the cash ledger.

What is the GST interest rate?

18% per annum under both Section 50(1) and Section 50(3).