Goods and Services Tax (GST) is an indirect tax applicable throughout India that replaces multiple taxes levied by the central and state governments. It is one of the most significant tax reforms in India, and since its implementation on 1st July 2017, it has evolved continuously, bringing in many changes. It is crucial for businesses to stay updated with the GST interest rates and be aware of the penalties that could be levied if one doesn’t comply with the regulations. The best way to get an accurate idea of the interest payable under GST is to use a GST interest calculator.
What is a GST Interest Calculator?
A GST interest calculator is an online tool that helps businesses and taxpayers calculate the GST interest they owe their respective governments. It calculates the interest payable based on various inputs like tax amount, payment date, and interest rate. It is a quick and easy way to estimate the interest percentage to be paid on delayed payments.
Here are some reasons why one should try the GST Interest Calculator:
Easy to Use
The GST interest calculator is user-friendly and easy to use. One simply has to input the necessary details, and the tool will provide the GST interest amount within seconds. It is an online tool, so there is no need to install any software.
Accurate
With the GST interest calculator, businesses can be sure that they will get an accurate calculation of the interest payable. The tool is designed to calculate the GST interest based on specific formulas, making it a reliable source of information.
Saves Time
Since the GST interest calculator is online, it saves time that would have been spent on manual calculations. With the calculator, businesses can get an estimate of the interest payable within seconds, eliminating the need to spend hours on complex calculations.
Saves Money
The GST interest calculator can help businesses save money in two ways: by mitigating the risk of penalties and by ensuring that they don’t overpay the interest amount. Late payments or non-compliance with the GST regulations could result in penalties, which can be avoided with the use of the GST interest calculator. Similarly, by calculating the exact interest due, businesses can avoid paying more than what is required.
How to use the GST Interest Calculator?
The GST interest calculator requires two types of inputs – the tax amount and the period of delay.
Tax Amount
The tax amount refers to the amount of GST payable to the government. It is essential to enter the exact amount as it will determine the GST interest due.
Period of Delay
Period of delay is the number of months for which the GST payment is delayed. For example, if the payment is due in January 2021, but it is made in April 2021, the period of delay would be three months.
Once the two inputs are entered, the GST interest calculator will provide the interest amount due. It is essential to note that businesses should use the latest interest rates while using the calculator.
Penalties for Non-compliance
It is crucial for businesses to comply with the GST regulations and make timely payments. Non-compliance could result in penalties, which could be severe. Here are some of the common penalties for non-compliance with the GST regulations:
Late Payment of Tax
According to the GST law, a penalty of 18% per annum is levied on the outstanding amount if the tax is not paid by the due date. The interest is calculated from the day after the due date of payment until the actual date of payment.
Late Filing of GST Returns
If a business fails to file the GST returns within the due date, it will be levied with a late fee of Rs. 50 per day subject to a maximum of Rs. 5,000. For businesses with no taxable sales, the late fee is Rs. 20 per day, subject to a maximum of Rs. 2,000.
Incorrect Filing of GST Returns
If a business files incorrect GST returns, it will be liable to a penalty of 10% of the tax amount due or Rs. 10,000, whichever is higher.
Conclusion
GST is an indirect tax applicable throughout India and one of the most significant tax reforms in India. It is crucial for businesses to stay updated with GST interest rates and be aware of the penalties that could be levied if one doesn’t comply with the regulations. The GST interest calculator is an accurate, easy-to-use tool that can help businesses estimate the interest payable on delayed payments. By using the GST interest calculator, businesses can save time and money while avoiding penalties.
