Tax, GST & International Trade Blog

From the January 2026 tax period onwards, the GST portal has implemented multiple system-driven enhancements in GSTR-3B filing, aimed at improving accuracy in interest computation, tax liability reporting, and Input Tax Credit (ITC) utilisation. These changes are aligned with the proviso to Section 50 of the CGST Act, 2017 and Rule 88B of the CGST Rules, 2017, and are applicable for returns filed with delay or involving liabilities of previous tax periods.

Update in Interest Computation in Table 5.1 of GSTR-3B

Background

Interest on delayed payment of tax is governed by Section 50 of the CGST Act, 2017, read with Rule 88B(1) of the CGST Rules, 2017. The proviso to Rule 88B allows adjustment of the minimum available cash balance in the Electronic Cash Ledger (ECL) while computing interest.

From January 2026 onwards, the GST portal has enhanced the system logic to extend this benefit automatically.

Revised Interest Computation Formula.

For delayed filing of GSTR-3B, interest in Table 5.1 shall now be computed using the following formula:

Interest = (Net Tax Liability – Minimum Cash Balance in ECL from due date to date of debit) × (Number of days delayed ÷ 365) × Applicable Interest Rate

1. System-Computed Interest – Key Points

• Interest auto-populated in Table 5.1 of GSTR-3B will be non-editable downward.
• Taxpayers cannot reduce the system-calculated interest amount.
• The auto-populated interest represents the minimum payable interest.
• Taxpayers are required to self-assess their actual interest liability and may increase the amount, if required.

Note:

This enhancement applies to delayed GSTR-3B filed for the January 2026 tax period, where interest will be auto-populated in the February 2026 GSTR-3B.

2. Auto-Population of Tax Liability Breakup Table in GSTR-3B

1. Purpose of the Tax Liability Breakup Table: The Tax Liability Breakup Table in GSTR-3B captures tax pertaining to supplies of previous tax periods that are reported in the current period and discharged through the current GSTR-3B.
   
   
2. System Enhancement From January 2026: From the January 2026 tax period onwards, the GST portal shall auto-populate the Tax Liability Breakup Table based on:
    1. Date of documents reported in GSTR-1 / GSTR-1A / IFF, and
   2. Tax liability discharged in the current GSTR-3B.
   
   
3. Navigation Path: Taxpayers can view the auto-populated breakup at:

Login → GSTR-3B Dashboard → Table 6.1 (Payment of Tax) → Tax Liability Breakup

Key Features

• Auto-populated values are suggestive in nature.
• Taxpayers may modify the figures upward, based on internal records and reconciliation.

3. Update in Table 6.1 – Suggestive Cross-Utilisation of ITC

1. Change in ITC Utilisation Logic: From the January 2026 tax period onwards:

• Once IGST ITC is fully exhausted,
• The GST portal will allow payment of IGST liability using available CGST and SGST ITC in any sequence.

2. Practical Impact: This change provides greater flexibility in ITC utilisation while remaining compliant with statutory provisions governing credit cross-utilisation.

4. Collection of Interest Through GSTR-10 for Cancelled Taxpayers

1. Applicability: 

In the case of cancelled GST registrations, where:

• The last applicable GSTR-3B is filed after the due date,

the applicable interest shall now be:

• Levied and collected through GSTR-10 (Final Return)

2. Compliance Consideration: 

Cancelled taxpayers must ensure timely filing of the final GSTR-3B to avoid additional interest liability being carried into GSTR-10.

Important Notes for Taxpayers:

• Auto-populated values are system-generated and indicative.
• Interest and tax liability must be independently verified by the taxpayer.
• Any shortfall in interest payment may attract future recovery proceedings.
• Statutory provisions shall prevail over system computation in case of discrepancy.

Conclusion

The enhancements introduced in GSTR-3B filing from the January 2026 tax period mark a significant step towards system-driven accuracy, transparency, and statutory alignment under GST. While automation reduces manual errors, taxpayers remain responsible for self-assessment, reconciliation, and correct discharge of tax and interest.

Businesses should review their cash ledger balances, delayed filings, ITC utilisation patterns, and past-period disclosures to ensure smooth compliance under the updated framework.

Notification Reference:  GSTN
30 /01 /2026