Interest is Calculated in GST as per following Formula

GST Payable*18%*No of Days/365

Let’s understand this with the help of an example

Question

Is Interest Calculated in Case of GST Credit

Suppose Output is 30000, Input is 40000

What is Interest payable if tax paid 5 days late

View AnswerOutput=30000

Input=40000

GST Payable=0

GST Credit=10000

In this case, since there is no GST Payable, No Interest is Payable

interest

=GST Payable*18%*No of Days/365

=0*18%*5/365

=0

However, earlier GST Department was charging int on Output and sending notice for it

=Output*18%*No of Days/365

=30000*18%*5/365

=Rs 74