Advisory on Interest Collection and Related Enhancements in GSTR-3B (Jan-2026 onwards): What changed, why it matters, and how to stay compliant

On 30 January 2026, GSTN issued an advisory announcing a set of GSTR-3B enhancements applicable from the January-2026 tax period onwards-with the biggest headline being system-driven interest computation in Table 5.1, now aligned more closely with Rule 88B(1) (proviso) and the proviso to Section 50.

These changes are not merely "portal cosmetics". They can directly impact:

This article decodes the advisory in a practical way-so that when you open GSTR-3B, you know what the portal is doing and what you still need to do yourself.

1) Legal backdrop: why interest computation is a sensitive issue

Under Section 50(1) of the CGST Act, interest is payable when tax remains unpaid within the prescribed period. The law (via a proviso) also clarifies that for delayed filing of returns under Section 39 (like GSTR-3B), interest is to be levied only on the portion of tax paid by debiting the electronic cash ledger, barring cases where proceedings under sections 73/74/74A have commenced.

The notified rate for:

To operationalise this, Rule 88B prescribes the manner of calculating interest. Importantly,

Rule 88B(1) contains a proviso that grants relief where an amount was already credited in the Electronic Cash Ledger (ECL) on or before the due date and remained lying there till it is debited-such amount is not to be considered for interest computation.

So, the policy intent is clear: if you had already deposited cash on time and only filed the return late, interest should not punish you for the portion that was already lying with the Government in your cash ledger.

The January-2026 portal enhancement is essentially Central Board of Indirect Taxes and Customs + GSTN trying to make the portal behave closer to this legal principle.

2) What the Jan-2026 advisory actually introduced (4 changes)

The GSTN advisory lists four enhancements effective from January-2026 tax period onwards:

1. Updated interest computation in Table 5.1 of GSTR-3B, giving benefit of minimum cash balance in ECL from due date to date of debit (offset).

2. Auto-population of "Tax Liability Breakup Table" in GSTR-3B for supplies of previous periods reported in current period (based on document dates in GSTR-1 / GSTR-1A / IFF).

3. Table 6.1 enhancement: after exhausting IGST ITC, portal allows CGST/SGST ITC to pay IGST liability in any sequence.

4. Interest collection through GSTR-10 for cancelled taxpayers where the last applicable GSTR-3B was filed late.

Let’s unpack each with practical implications.

3) Enhancement #1: Interest computation in Table 5.1 is now "cash-ledger sensitive"

(A) What changed

From the January-2026 tax period onwards, the portal’s interest calculation in Table 5.1 has been enhanced to provide benefit of the minimum cash balance available in the Electronic Cash Ledger from the return due date until the date of tax payment (offset), aligned with Rule 88B(1) proviso.

When will you see it?

The advisory clarifies that this change applies such that interest for delayed January-2026 GSTR-3B (if any) will be auto-populated in the February-2026 GSTR-3B.

(B) Revised formula (as per advisory)

The advisory provides this revised formula:

Interest = (Net Tax Liability – Minimum Cash Balance in ECL from due date to date of debit) × (No. of days delayed / 365) × Applicable Interest Rate

Translation into plain English:

(C) Why "minimum cash balance" matters (and how to think about it)

This is a subtle but powerful shift.

Suppose you deposited money in your Electronic Cash Ledger on/before the due date, but filed/offset the return later. Under Rule 88B(1) proviso, that deposited amount shouldn’t attract interest-because the funds were already sitting in your ECL.

The portal is now trying to reflect that by reducing interest base to the extent of the minimum ECL balance maintained during the delay window.

Practical takeaway:

If you want maximum benefit, the cash should be credited on/before due date and should remain there (not get dipped below that amount) until you actually offset it.

(D) Two quick examples (with clean math)

Example 1: Partial cash was lying in ECL-interest reduces

Interest base = Rs.10,00,000 − Rs.3,00,000 = Rs.7,00,000

Interest = Rs.7,00,000 × (20/365) × 18%

= Rs.7,00,000 × 0.18 × 20/365

= Rs.1,26,000 × 20/365

= Rs.25,20,000 / 365

≈ Rs.6,904.11

Example 2: Entire amount was lying in ECL-interest becomes nil (for that portion)

Interest base = Rs.5,00,000 − Rs.5,00,000 = Rs.0

Interest = Rs.0

(Subject to the portal recognising the balance as "lying in the ledger" per Rule 88B proviso conditions. )

(E) System-computed interest is now "minimum payable" and cannot be reduced

The advisory states:

This is important for professionals: the portal is not giving you a "complete interest certification"-it is giving a floor. The responsibility to compute correct interest (especially in messy scenarios like earlier-period liabilities paid later) still rests with the taxpayer.

4) Enhancement #2: Auto-population of "Tax Liability Breakup Table" (Table 6.1) for earlier-period supplies

(A) What the portal will do now

From January-2026 onwards, the portal shall auto-populate the Tax Liability Breakup Table in GSTR-3B based on the document date of supplies reported in GSTR-1 / GSTR-1A / IFF pertaining to previous tax periods, where tax liability is discharged in the current period’s GSTR-3B.

(B) Why this matters (interest + audit trail)

Interest under Rule 88B is inherently period-sensitive-delay is counted from the due date of the relevant period. If you are paying tax in February for an invoice dated December (and reported now), the "days of delay" logic can differ.

This auto-population is meant to:

(C) Is it mandatory? Can it be changed?

The advisory’s "Key Features" clarify:

So it’s not intended to trap genuine cases-but it does tighten the alignment between what you reported in GSTR-1 and what you are paying in GSTR-3B.

(D) Where to view it

The advisory provides the navigation path:

Login → GSTR-3B Dashboard → Table 6.1 (Payment of Tax) → Tax Liability Breakup

5) Enhancement #3: Table 6.1 – flexible cross-utilisation of CGST/SGST ITC for IGST (after IGST ITC exhausts)

(A) What changed

From January-2026 onwards, once available IGST ITC is fully exhausted, the portal will allow you to pay IGST liability using available CGST and SGST ITC in any sequence.

(B) Why this was needed (the "sequence" pain)

The legal framework requires IGST credit to be exhausted first before using CGST/SGST credits for discharging liabilities, and Rule 88A has historically allowed flexibility for IGST ITC utilisation between CGST and SGST.

However, portal validations and UI constraints often forced a rigid order that did not always match a taxpayer’s working-capital strategy. GSTN is now introducing flexibility after IGST ITC is exhausted-which is consistent with the broad intent in circular clarifications around utilisation sequence.

(C) Practical impact

6) Enhancement #4: Interest collection via GSTR-10 for cancelled taxpayers (last GSTR-3B filed late)

(A) The problem GSTN is solving

When a registration is cancelled, the taxpayer is required to file a final return (GSTR-10) under Section 45 and Rule 81.

But there was a practical gap: if the last applicable GSTR-3B was filed after due date, the system needed a mechanism to ensure interest is levied and collected even when the taxpayer is moving toward closure.

(B) What the advisory states

For cancelled taxpayers, if the last applicable GSTR-3B is filed late, the applicable interest on that delayed filing shall be levied and collected through GSTR-10.

(C) Practical compliance note

If you handle cancellations (closures, restructurings, dormant registrations), treat GSTR-10 as more than a formality now-it becomes an interest-collection touchpoint for last-period delays.

7) Action checklist for taxpayers & consultants (Jan-2026 onwards)

A. Before the due date (best practice to reduce interest exposure)

B. While filing GSTR-3B

C. For cancelled registrations

8) FAQs (quick clarity)

Q1. If I file GSTR-3B late but I had enough cash in ECL on due date, will interest be zero? It can reduce substantially (or become nil for that portion) because Rule 88B(1) proviso says such amount credited on/before due date and lying till debit is not considered for interest. The advisory’s formula explicitly reduces "net tax liability" by the minimum cash balance maintained.

Q2. Can I edit the system-populated interest downwards if I believe it’s wrong?

No-GSTN states auto-populated interest in Table 5.1 is non-editable downward; you can only adjust upwards if required.

Q3. Why is GSTN calling the auto-populated interest "minimum"?

Because the portal’s computation is system-based and may not capture every factual/legal nuance (e.g., complex earlier-period liability scenarios). GSTN expects taxpayers to self-assess and increase the figure when warranted.

Q4. Is the tax liability break-up table compulsory to follow as-is?

No. It is "suggestive in nature" and can be modified upwards based on your records.

Closing note

The Jan-2026 advisory is a clear step towards systemising interest collection and ensuring that GSTR-3B is more tightly anchored to:

Disclaimer: The information given in this article is solely for purpose of understanding the law. It is completely based on the interpretation of the author and cannot be constituted as a legal advise, the author of this article and Lawcrux team is not responsible for any legal issues if arises on the basis of the interpretation given above.