Advisory on Re-Computation of Interest under Table 5.1 of GSTR-3B

The GST Portal has introduced an important facilitation measure allowing taxpayers to re-compute interest in GSTR-3B. This update becomes particularly relevant in light of a system glitch identified for the February 2026 tax period, which led to incorrect interest computation in certain cases.

Background: System-Computed Interest in GSTR-3B

As part of the compliance framework, the GST Portal auto-calculates interest on delayed filing of GSTR-3B based on the tax liability discharged and the liability breakup declared in the return. This system-computed interest is not collected immediately but is carried forward and auto-populated in Table 5.1 of the subsequent GSTR-3B. The mechanism is similar to the collection of late fees.

Taxpayers can verify the detailed working of such interest through the system-generated GSTR-3B PDF available on the portal under the return dashboard.

Legal Position Governing Interest

The levy of interest under GST is governed by Section 50 of the Central Goods and Services Tax Act, 2017 read with Rule 88B of the CGST Rules, 2017. The principle laid down is that interest is payable only on the net tax liability discharged through cash, after considering the balance available in the Electronic Cash Ledger. This ensures that taxpayers are not charged interest on amounts that were already available with the government.

Issue Identified for February 2026

GSTN has acknowledged that due to a technical glitch, the system failed to consider the available balance in the Electronic Cash Ledger while computing interest for the February 2026 period. As a result, excess interest was calculated in some cases and subsequently auto-populated in Table 5.1 of the March 2026 GSTR-3B.

Re-Computation Facility Introduced

To address this issue, the GST Portal has now enabled a “Re-compute Interest” option within Table 5.1 of GSTR-3B. Upon using this option, the system recalculates the interest based on the correct parameters, including the benefit of cash ledger balances. The revised computation is reflected in the updated system-generated GSTR-3B PDF.

What Taxpayers Should Do

Taxpayers should access the March 2026 GSTR-3B, use the re-compute interest option, and download the updated system-generated PDF to verify the corrected figures. Based on this revised computation, the interest amount in Table 5.1 should be manually updated.

It is important to note that the manually entered interest cannot be less than the recomputed value reflected in the system-generated PDF, and the portal enforces this restriction.

Concluding Remarks

This update highlights that interest computation under GST is not merely a system-driven process but is governed by specific legal provisions. While automation assists in compliance, taxpayers and professionals must continue to verify computations independently, especially in cases involving cash ledger balances and timing of payments.

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Advisory on Re-Computation of Interest under Table 5.1 of GSTR 3B

Disclaimer: This material and the information contained herein is intended for clients and other Chartered Accountants to provide updates and is not an exhaustive treatment of such subject. We are not, by means of this material, rendering any professional advice or services. It should not be relied upon as the sole basis for any decision which may affect you or your business.