ANNEXURE-1
ADVISORY ON INTEREST CALCULATOR IN GSTR-3B

Annexure with illustrative example

1. To explain the new functionality, 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 October2021. 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 purpose of 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 by the system as per the aforesaid values declared by the taxpayer. However, this gap exists in the current GSTR-3B implementation, to cover which new feature has been added.

New feature in GSTR-3B

2. Tax Liability Breakup, As Applicable button in GSTR-3B: A new button called Tax Liability Breakup, As Applicable 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 Breakup, As Applicable button will be enabled only after clicking the ‘Make payment/Post credit to ledger’ button. In other words, break-up of the tax-period 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

5. 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 break-up, 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.

6. Auto-population of interest : The interest values computed above will be autopopulated 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 tax-period, 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.

7. 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.

8. 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 GSTR-3B with changed values.

9. Depending on the number of tax-periods declared by the taxpayer in the tax-period wise break-up, 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.

Changesinuser experience

10. Even after the interest calculator is enabled on the GST Portal, there will be no change in the user experience for the taxpayers who have not made any delayed payment of tax liability pertaining to earlier period(s).

The taxpayer having tax liability pertaining to earlier tax period(s) can use the facility to provide the break-up of liability of the past period(s).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.

For details of declaring tax-period wise tax liability, please refer to paras. 2-4 above.