The GST Portal has introduced important system-driven enhancements in GSTR-3B filing effective from the January 2026 tax period onwards. These updates primarily focus on:

• Revised interest computation mechanism
• Auto-population of tax liability breakup
• Suggestive ITC cross-utilisation
• Interest collection in GSTR-10 (Final Return)

These changes are aligned with the provisions of the Central Goods and Services Tax Act, 2017 and Central Goods and Services Tax Rules, 2017, particularly Section 50 and Rule 88B, and aim to improve transparency, accuracy, and system-based compliance for taxpayers.

Update in Interest Computation for GSTR-3B

Revised Interest Calculation from January 2026

From the January 2026 tax period, interest calculation in Table 5.1 of GSTR-3B has been enhanced.

The key change is that the system now provides benefit of the minimum cash balance available in the Electronic Cash Ledger (ECL) from:

• The due date of return filing
• Until the date of tax payment (offset)

This enhancement aligns with the proviso to Rule 88B(1) and Section 50 of the CGST framework.

Revised Interest Computation 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

This formula ensures that interest is charged only on the actual unpaid portion of tax, after considering available cash balance.

System-Computed Interest in Table 5.1

• Interest auto-populated in Table 5.1 will be non-editable downward
• Taxpayers cannot reduce the system-calculated interest
• Taxpayers may increase (edit upward) if self-assessment requires higher interest payment

Important Note:

The interest auto-populated in GSTR-3B represents only the minimum interest payable. Taxpayers are responsible for verifying and paying correct interest liability.

Additionally:

• This revised computation applies to delayed returns of January 2026
• The corresponding interest will auto-populate in February 2026 GSTR-3B

2.Auto-Population of Tax Liability Breakup Table

 What Has Changed?

From January 2026 onwards, the GST Portal will auto-populate the Tax Liability Breakup Table in GSTR-3B.

This table captures:

• Supplies of previous tax periods
• Reported in the current period
• Where tax liability is discharged in the current GSTR-3B

Auto-population is based on document dates reported in:

• GSTR-1
• GSTR-1A
• IFF

 Where to View the Auto-Populated Data?

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

Key Features of This Enhancement

• Auto-populated values are suggestive
• Taxpayers can modify values upward
• Helps in accurate tax period classification
• Improves compliance tracking

This enhancement ensures better alignment with statutory provisions and improves reconciliation accuracy.

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

From January 2026 onwards:

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

This provides flexibility in ITC utilization while remaining within legal provisions.

4.Interest Collection in GSTR-10 (Final Return)

In cases where:

• GST registration is cancelled
• The last applicable GSTR-3B is filed after the due date

The applicable interest for delayed filing will now be:

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

This ensures closure of outstanding interest liability before final compliance.

Compliance Impact for Businesses

These enhancements aim to:

• Reduce manual computation errors
• Increase system-based compliance
• Improve transparency in interest calculation
• Assist businesses in accurate reporting
• Strengthen audit preparedness

For exporters, manufacturers, and trading businesses managing multiple tax periods, this system-driven approach enhances financial accuracy and regulatory alignment.

Conclusion

The January 2026 enhancements in GSTR-3B reflect a shift toward technology-backed compliance and automated validation under GST. By integrating ledger-based interest computation and auto-populated liability reporting, the GST Portal strengthens accuracy and reduces ambiguity in interest calculation.

However, taxpayers must continue to:

• Independently verify interest liability
• Monitor ledger balances
• Ensure correct ITC utilization
• Track delayed filings carefully

Proactive compliance and timely filing remain critical to avoiding interest exposure and reconciliation mismatches.