Interest Rate for Late GST Payment
GSTZone Desk · Updated 2026
Short answer
18% per annum on tax paid after the due date — but a steeper 24% per annum applies specifically where input tax credit was wrongly availed AND actually utilised (used to pay output tax), rather than just claimed and left unused.
In detail
Section 50 sets these two different rates deliberately. The standard 18% is a straightforward time-value-of-money charge on tax that should have reached the government earlier — it applies to ordinary delayed payment of tax.
The 24% rate is meant to discourage a more specific behaviour: claiming ITC you weren’t entitled to, and then actually using it to reduce a genuine tax liability. If wrongly-claimed ITC just sits unused in your credit ledger and is reversed before it’s ever utilised, the higher 24% rate generally doesn’t apply — the steeper rate is tied to the credit having actually been put to use.
Interest runs from the original due date until the date of actual payment — it’s calculated per day, not rounded to the nearest month, so even a short delay of a few days accrues real interest, just proportionally less than a longer one.
GSTZone tip
If you discover a wrongly claimed ITC entry before you’ve actually used it against output tax, reverse it immediately rather than waiting — that timing genuinely affects which interest rate applies to the correction.
Related questions
Is interest calculated on the gross tax liability or the net cash payment?+
A 2021 retrospective clarification confirmed interest under the standard rate applies to the tax paid in cash (the net liability after adjusting available ITC), not the gross output tax before any credit adjustment.
Can interest be waived if I had a genuine reason for the delay?+
Interest isn’t typically waivable through an ordinary administrative request — it’s treated as compensatory rather than punitive, so a genuine reason for delay doesn’t usually remove the interest liability, though it can matter for penalty.
Want the law itself?
Go deeper on Paying Tax
This page answers one question. Our GST Knowledge Hub carries every section and rule behind it — the exact legal text, what it means in plain English, and how it has been amended. Free, no login.
Need this sorted for your specific case?
Every business’s facts are a little different. Talk to a GSTZone expert — we’ll tell you exactly where you stand, and handle the filing if you need it.
Or call +91 97554 06939 · WhatsApp us