GSTN enables the functionality of interest calculator in GSTR-3B


What is GSTR-3B?

GSTR-3B is a monthly self-declaration to be filed by a registered GST dealer along with GSTR 1 and GSTR 2 return forms. It is a simplified return to declare summary GST liabilities for a tax period.

Who should file GSTR-3B?

All taxpayers, including those with nil returns, are required to file this GST Return Form on a monthly basis.

There are a few exceptions:

  • Input Service Distributors & Composition Dealers
  • Suppliers of OIDAR ( Online Information Database Access and Retrieval Services)
  • Non-resident taxable person

GSTN enables new functionality of interest calculator for taxpayers while filing their Form 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.

The interest computed by the system has been aligned with the Section-5o of the CGST Act, 2017, as amended. Consequently, interest liability for respect of supplies made during the present tax period and declared in the GSTR-3B for this period will be calculated only on that portion of the tax which is paid by debiting the electronic cash ledger, e., tax paid in cash. With respect to the liability pertaining to the previous tax period (s), and paid in later GSTR-3B, the interest will be computed for the entire liability, whether paid by debiting the electronic cash ledger or electronic credit ledger.

Auto population of system computed interest

This new functionality will compute the minimum interest applicable on the basis of the values declared by the taxpayers in GSTR-3B for a particular 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, initially. However, the system-generated PDF of filed GSTR-3B will contain both values: the System computed interest, and the user paid interest values.

Now that GSTN has enabled the feature of calculating interest, let us understand when interest comes into the picture.

Interest liability can arise in cases of either of the following, or both :

Delayed filing of return: If the present GSTR-3B is filed after the ‘due date’, then interest will be applicable at the prescribed rate of interest from the ‘due date’ of GSTR-3B for the relevant period i.e. till the date of filing of the return.

Delayed declaration of liability: If the liability pertaining to previous tax periods is discharged in the present GSTR-3B, then interest will be leviable from the ‘due date’ of return for the said previous period till the date of declaration of the liability in the return. Thus, as part of the interest calculator, a new feature has been provided to GSTR-3B for allowing taxpayers to voluntarily declare Tax-period wise break-up of liability. If a taxpayer is discharging liability for any past period(s) in the present GSTR- 3B, then an exact tax-period-wise break-up of the same can be provided by the taxpayers. The interest will be thereafter computed by the system accordingly.

Furnishing tax-period wise break-up in GSTR-3B:

The return in FORM GSTR-3B, as it is now, 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. Thus, for computing the exact interest liability, the information regarding the tax-period-wise break-up of the consolidated tax liability declared by the taxpayer would be required by the system.

In view of the above, a new button has been added in GSTR-3B, called Tax Liability Break- up (Voluntary), 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.

Are there any changes in user experience?

Here is the list which will make you understand

Taxpayer filing GSTR-3B after Due date:

For taxpayers who are filing after the ‘due date’, a pop-up will be shown regarding the option to declare tax-period-wise tax liability, if applicable to them. If they have any tax liability pertaining to any previous tax period to declare, they may declare the same. If the entire liability pertains to the present period, then they may ignore this pop-up message, and continue their filing as usual. If no previous period tax liability is declared, by default the interest will be computed by assuming that the entire tax liability pertains to the present period.

Taxpayers filing on or before Due date of GSTR-3B: After the interest calculator is enabled on the GST Portal, there will be no change in the user experience for the taxpayers who file their return on or before the ‘due date’. The taxpayer would still have the facility to provide the break-up of liability of the past period(s). For details of declaring tax-period-wise tax liability, please refer to the Annexure.

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.

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

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