View calculation formula
Interest = Tax Amount × Rate × Days / 365
Daily Rate = 18% / 365 = 0.0493%
Based on Section 50 of CGST Act. Interest is calculated from the day after the due date.
How to Calculate GST Interest
4 simple steps
Enter Tax Amount
Input the GST amount that was due
Select Interest Rate
Choose 18% (late payment) or 24% (wrongful ITC)
Set Dates
Enter due date and actual payment date
Get Interest
View the interest amount payable instantly
Interest Rates Under Section 50
Know which rate applies to your situation
18% per annum
Late Payment of Tax
Section 50(1) of CGST Act
- Delayed payment of GST tax liability
- Calculated from day after due date
- Most common scenario for businesses
24% per annum
Wrongful ITC Claim
Section 50(3) of CGST Act
- Excess or wrongful ITC availment
- Wrongful utilization of ITC
- Higher penalty rate applies
Reference: Section 50 of the Central Goods and Services Tax (CGST) Act, 2017
Interest Calculation Formula
Understand the math behind the penalty
Interest = Tax × Rate × Days ÷ 365
Example Scenario
₹10,000 tax due • 30 days late • 18% rate
₹10,000 × 18% × 30/365
₹10,000 × 0.18 × 0.0822
= ₹147.95
- Daily Rate = 18% / 365 ≈ 0.0493% per day
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Frequently Asked Questions
Common questions about GST interest calculation
What is the interest rate on late payment of GST?
Under Section 50 of CGST Act, there are two interest rates: 18% per annum for general late payment of GST (Section 50(1)), and 24% per annum for wrongful availment or utilization of Input Tax Credit (Section 50(3)).
How is interest calculated on delayed GST payment?
Interest is calculated using the formula: Interest = Tax Amount × (Rate/100) × (Days/365). For example, if you owe ₹10,000 GST and pay 30 days late at 18% rate, interest = ₹10,000 × 0.18 × (30/365) = ₹147.95.
What is Section 50 of the CGST Act?
Section 50 of the Central Goods and Services Tax (CGST) Act, 2017 deals with interest on delayed payment of tax. It specifies the interest rates and conditions under which interest is levied on taxpayers who fail to pay GST on time.
Is GST interest different from GST late fee?
Yes, they are different! Interest is charged on the **tax amount** (like a loan interest). Late Fee is a **penalty for not filing the form** (like a fine). You often have to pay BOTH if you are late.
Can I claim interest paid as a deduction?
No. Interest paid under Section 50 is NOT eligible for Input Tax Credit (ITC). It is a penalty and must be treated as a business expense in your accounting, but you cannot claim it back from the government.
Does the system calculate interest automatically?
Yes and No. When you file GSTR-3B late, the system might auto-populate the interest for the NEXT month. However, it is your legal duty to self-assess and pay the interest for the current delay immediately using a Challan.
Can the interest be waived?
Generally, no. GST interest is mandatory and automatic under the law. Unless there is a specific government notification waiving it for a crisis period (like COVID-19), you must pay it.