Understanding GST Late Deposit Interest and How to Calculate It

What is GST Late Deposit Interest?

Goods and Services Tax (GST) is a crucial part of business compliance in India. As a registered taxpayer, you are required to deposit your GST liability on time. However, if there is any delay in payment, the government imposes an interest charge for the late deposit of tax. This interest is calculated on a daily basis and must be paid along with the tax liability.

Interest Rate on Late GST Payment

The interest on delayed GST payment is prescribed under the GST law. The rates are:

• 18% per annum for delayed payment of tax.
• 24% per annum for excess Input Tax Credit (ITC) wrongly claimed or utilized.

The interest is calculated from the due date of payment till the actual date of deposit.

How to Calculate GST Late Deposit Interest?

The formula for calculating GST interest is simple:

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

For example, if you have a pending GST payment of ₹50,000 and the delay is 30 days, the interest calculation will be:

(50,000 × 18 × 30) ÷ 365 = ₹739.73

Use Our GST Late Deposit Interest Calculator

Manually calculating interest can be time-consuming and prone to errors. To simplify this process, use our GST Late Deposit Interest Calculator above. Just enter your tax amount, delay period, and applicable interest rate, and get instant results.

Why Timely GST Payment is Important?

• Avoid additional interest costs.
• Maintain compliance with GST laws.
• Prevent any legal actions or penalties from the tax authorities.

If you have any questions regarding GST payments, interest calculations, or compliance, feel free to explore our website for more useful tools and guides!