GSTN: ADVISORY ON INTEREST CALCULATOR IN GSTR-3B

The Team GSTN issued an advisory on the interest calculator in GSTR-3B.

1. To begin with, understanding the new facility, an illustrative example is being provided, showing sample data for a taxpayer, and how the details have to be entered in a GSTR-3B, and how the interest for the same will be computed & appear in the subsequent GSTR-3B.

Illustration :

I. A monthly taxpayer is filing GSTR-3B for the tax period of October 2021. In the said GSTR-3B, the taxpayer has declared the following values in Table-3.1 of GSTR-3B :

However, these consolidated tax liability values consist of not only for October 2021 but also for previous tax-periods of July, August & September 2021.

ii. Hence, for the purposes of proper interest calculation, the taxpayer would be expected to declare the following tax-period wise break-up in GSTR-3B for October 2021, in the following manner :

iii. The interest calculation could be thereafter done as per the aforesaid values declared by the taxpayer, easily by the system. However, this gap exists in the current GSTR3B implementation, to cover which new feature has been added.

New feature in GSTR 3B

2. Tax Liability Break-up (Voluntary) button in GSTR-3B: A new button called Tax Liability Break-up (Voluntary) will be provided in GSTR-3B for furnishing the tax-period wise break-up of tax liability. This button will appear in GSTR-3B on the payment page, below the Table 6.1 – Payment of tax.

The Tax Liability Break-up (Voluntary) button will be enabled only after clicking the ‘Make payment/Post credit to ledger’ button. In other words, break-up of the taxperiod wise values can be furnished by the taxpayers after making payment of the liability for this period.

This button will also appear on the filing page of GSTR-3B.

3. If the taxpayers click on this button, they will be provided with an option of declaring taxperiod wise break-up of the tax liability discharged by them in this GSTR-3B. The values could be declared head-wise, and the total value for all the tax-periods put together should be equal to the tax liability paid in the GSTR-3B.

4. On clicking the Save button, the option to File GSTR-3B through EVC or DSC will be enabled.

Auto-population of system computed interest in next GSTR-3B

System computation of interest: After filing this GSTR-3B, the system will compute the interest liability on the basis of the values declared in this GSTR-3B. This computation will be done in accordance with the provisions of the Section-50 of the Act, as amended.

Interest will be computed for each tax-period as per the following formula :

Depending on the number of tax-periods declared by the taxpayer in the tax-period wise breakup, the interest liability for each tax-period will be calculated separately as per this formula. The interest values for different periods will then be added, and the total interest liability will be computed for each head by the system.

Auto-population of interest: The interest values computed above will be auto-populated in
the Table 5.1 – Interest and Late fee for previous tax period of GSTR-3B of the next tax-period.
The break-up and the manner of interest computation can be viewed by clicking the System
Generated GSTR-3B button on this page.

This is on the lines of the auto-population of Late fees for the previous tax-period in the subsequent tax-period.Just like the system-computed late fees is auto-populated in the next taxperiod, now the system-computed interest will also be populated in the GSTR-3B of the next
tax-period. The system computed values will also be displayed to the user on mouse-hovering.

To begin with, system will not stop the users from changing the system computed interest values. However, the system will warn the taxpayers on downward editing of the interest values in any tax head. On downward editing of values, the concerned cell will become Red and the system computed values will also be shown during mouse hovering to caution the taxpayer from making a mistake.

If the taxpayer attempts to file GSTR-3B with the downward edited values, the interest tile
would become Red and also the system will provide a Warning regarding the same to the user.
However, despite these warnings, the system will not stop the taxpayers from filing their GSTR3B with changed values.

GSTR-3B filing : After the filing, the PDF of the filed GSTR-3B is generated by the system, which can be downloaded by the users. In this PDF document, in addition to the information presently shown, the PDF will also consist of information pertaining to system computed interest, in case it is applicable in that GSTR-3B. This information will include the head-wise details of computation of interest, for all the tax-periods on which interest is applicable.

Changes in user experience

Taxpayers filing on or before Due date of GSTR-3B : Even after the interest calculator is enabled on the GST Portal, there will be absolutely no change in the user experience for the taxpayers who file their return on or before the Due date, and who have not made any delayed payment of tax liability pertaining to earlier period(s). 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 para. 9 above.

Taxpayer filing GSTR-3B after Due date : For taxpayers who are filing after Due date, a popup 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 the previous period tax liability is not declared, the interest will by default be computed by assuming that the entire tax liability pertains to the present period.

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