Interest rate reduced to 9% for GST payment delays

Taxpayers with annual turnover of ₹5 crore or more, are not availing the extension for paying GST and filing returns as many of them find the 9% per annum interest from the due date. The government has extended the dates of filing GSTR 3B returns due in March, April and May 2020 to last week of June 2020. Those having aggregate annual turnover less than ₹5 crore, no interest but late fee and penalty will be charged. But for those with turnover of ₹5 crore or more, an interest at the reduced rate to 9% per annum, from due date will be charged.

But not all businesses are weighing options between paying interest on late payment of GST and interest on bank loan. For many SMEs with turnover of ₹5 crore or more, the question is whether to pay the salaries or file GST returns. Those SMEs which have enough cash flow to pay salaries would like to pay GST liabilities on time and save on the 9% interest cost that they otherwise would incur.

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