GST Interest Calculator

When this applies

• You are paying GST after the due date and need the interest to include.
• You are reconciling the interest the portal has charged.
• You are estimating the cost of a short delay before you decide when to pay.
• You reversed an input tax credit late and need the interest on it.

Interest on INR 50,000 of tax paid 30 days late at 18%

1. 1Tax paid late: INR 50,000. Rate: 18% per annum. Days late: 30.
2. 2Interest = 50,000 x 18 / 100 x 30 / 365.
3. 350,000 x 0.18 = INR 9,000 per year.
4. 49,000 x 30 / 365 = about INR 740.
5. 5Total payable = 50,000 + 740 = INR 50,740.

Interest is about INR 740, making the total INR 50,740.

What this calculator does

Work out the interest on GST paid after its due date. Enter the tax, the annual rate and the number of days late, and it returns the interest and the total you owe.

How this is calculated

Interest under GST is charged on the tax that was paid late, at an annual rate, pro-rated by the days of delay over a 365-day year. The standard rate is 18% per annum, though a higher rate applies to certain cases such as excess input tax credit availed and reversed. The calculation is tax x rate / 100 x days / 365.

The formula

Interest = tax × rate/100 × days/365

Common mistakes to avoid

• Charging interest on the invoice value

  Interest runs on the tax component only. Charging it on the full invoice value overstates the interest substantially.

• Using a 360-day year

  GST interest is computed over 365 days. A 360-day basis inflates the figure.

• Using 18% for an excess-ITC case

  Where input tax credit is availed and utilised in excess, the rate is higher. Using 18% there understates the interest.

Frequently asked

What rate does GST interest use?

The standard rate is 18% per annum, charged on the tax paid late. A higher rate (currently 24%) applies to certain cases, including excess input tax credit availed and utilised. Set the rate to the one that applies to your situation.

How is the interest calculated?

As tax x rate / 100 x days / 365. Interest runs on the tax component, not on the late fee, and is pro-rated for the actual days of delay.

Does interest run on the whole invoice or just the tax?

On the tax that was due and paid late, not on the value of the supply. A late payment of tax is what attracts interest.

Is this the same as the late fee?

No. The late fee is charged for filing a return late; interest is charged for paying tax late. A delayed filing usually attracts both.

Why 365 days and not 360?

GST interest is computed on a 365-day year. Using 360 days would overstate the interest slightly.