Big Relief for GST Taxpayers: GSTN Revises Interest Calculation for Late GSTR-3B Filing [Read Notification]
From January 2026, GSTN is simplifying GSTR-3B by auto-calculating interest more fairly, auto-filling tax details, allowing flexible ITC use, and streamlining interest recovery for cancelled registrations.
The GST Network (GSTN) has announced several important changes in the filing of GSTR-3B, effective from the January 2026 tax period. These changes are to make interest calculation more accurate and easing return filing for taxpayers.
Interest calculation improved
From January 2026 onwards, the GST portal will calculate interest on delayed GSTR-3B returns by giving relief for the minimum cash balance available in the taxpayer’s Electronic Cash Ledger (ECL) during the delay period. This change follows the provisions of Rule 88B(1) of the CGST Rules, 2017.
Interest will now be calculated on the net tax liability after reducing the minimum available cash balance, instead of the full tax amount. For delayed January 2026 returns, the interest amount will be auto-calculated and shown in the February 2026 GSTR-3B.
The auto-calculated interest will be non-editable downward, meaning taxpayers cannot reduce it. However, they may increase it if their actual interest liability is higher. The auto-populated figure represents the minimum interest payable.
Auto-population of tax liability breakup
The GST portal will also auto-populate the Tax Liability Breakup Table in GSTR-3B. This table shows tax related to supplies of earlier tax periods that are being paid in the current return.
The system will pick this information based on document dates reported in GSTR-1, GSTR-1A, or IFF. These values are only suggestive, and taxpayers can revise them upward if needed. The breakup can be viewed in Table 6.1 (Payment of Tax) on the GSTR-3B dashboard.
More flexibility in ITC usage
Another key change allows greater flexibility in Input Tax Credit (ITC) utilization. Once IGST ITC is fully used, taxpayers can now pay remaining IGST liability using CGST and SGST ITC in any order, directly in Table 6.1 of GSTR-3B.
Interest to be collected through GSTR-10
- For taxpayers whose GST registration has been cancelled, if the last applicable
- GSTR-3B is filed late, the interest on such delay will now be collected through the final return, GSTR-10.
According to GSTN, these updates are meant to improve accuracy in tax reporting, align interest calculation with the law, and make return filing simpler for taxpayers.
GSTN has clarified that the advisory is for informational purposes only, and taxpayers should rely on the GST law and rules for compliance.
The detailed advisory is available below
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