Section 50 CGST interest in two parts: 18% p.a. on tax paid late (only on the portion paid through the cash ledger) and 24% p.a. on input tax credit wrongly availed and utilised, counted from the date of utilisation. Interest only; for the return late fee use the GST late fee calculator.
Late-paid tax carries 18% from the day after the due date. Wrongly availed ITC carries 24%, but only once it has been utilised, and the clock starts at utilisation rather than at the date the credit was taken. Reversing the credit before it is used does not attract Section 50(3) interest.
Late payment of tax, Section 50(1) and (2): interest is payable at the notified rate, 18% per annum, from the day succeeding the due date until the tax is paid. Where the return is furnished after the due date, the proviso to Section 50(1) (and Rule 88B(1)) limits interest to the portion of tax paid by debiting the electronic cash ledger, not the amount set off against ITC. That proviso was substituted by the Finance Act 2021 with effect from 1 July 2017 and brought into force on 1 June 2021.
Wrongly availed ITC, Section 50(3): interest applies where input tax credit has been wrongly availed and utilised, at the notified rate of 24% per annum. Rule 88B(3) counts it from the date of utilisation to the date of reversal or payment, and treats the credit as utilised when the electronic credit ledger balance falls below the wrongly availed amount. This wording was substituted by the Finance Act 2022 (deemed from 1 July 2017) and brought into force on 5 July 2022 by Notification 9/2022-Central Tax.
Formula: interest = amount x rate x days / 365. Days are counted from the day after the due date (or from the utilisation date for ITC) to the payment or reversal date.
Tax due 20 Aug 2026, paid 18 Sep 2026 (29 days), of which ₹1,50,000 came from the cash ledger. Separately ₹2,00,000 of ineligible ITC was utilised on 10 Apr 2026 and reversed on 18 Sep 2026 (161 days).
