Chapter X - Payment of tax
Section 50
Section 50: Interest on delayed payment of tax
Section 50 provides interest on overdue tax and on ITC wrongly availed and utilised; rates are notified within statutory ceilings and calculation follows Rules.
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Need advice on Section 50?
This article is for general information. Refer to the Central Goods and Services Tax Act, 2017 official text for the official provisions. If you need professional advice for your situation, contact Bizeneed.
Statutory text
Bare law
(1) Every person who is liable to pay tax in accordance with the provisions of this Act or the rules made thereunder, but fails to pay the tax or any part thereof to the Government within the period prescribed, shall for the period for which the tax or any part thereof remains unpaid, pay, on his own, interest at such rate, not exceeding eighteen per cent., as may be notified by the Government on the recommendations of the Council. Provided that the interest on tax payable in respect of supplies made during a tax period and declared in the return for the said period furnished after the due date in accordance with the provisions of section 39, except where such return is furnished after commencement of any proceedings under section 73 or section 74 or section 74A in respect of the said period, shall be payable on that portion of the tax which is paid by debiting the electronic cash ledger.
(2) The interest under sub-section (1) shall be calculated, in such manner as may be prescribed, from the day succeeding the day on which such tax was due to be paid.
(3) Where the input tax credit has been wrongly availed and utilised, the registered person shall pay interest on such input tax credit wrongly availed and utilised, at such rate not exceeding twenty-four per cent. as may be notified by the Government, on the recommendations of the Council, and the interest shall be calculated, in such manner as may be prescribed.
Introduction
Interest is a separate consequence of delayed payment. The Act distinguishes unpaid tax from input tax credit that was both wrongly availed and utilised.
Key takeaways
Overdue tax
A person who fails to pay tax by the prescribed deadline pays interest for the unpaid period at the notified rate, capped by the Act at 18%.
Late-filed return cash component
For qualifying supplies declared in the relevant section 39 return filed late, interest applies to the portion of tax paid by debiting the cash ledger. This proviso does not apply when that return is furnished after commencement of proceedings under section 73, 74 or 74A for that period.
Calculation start
Interest on unpaid tax is calculated in the prescribed manner from the day after tax was due.
Wrong ITC
The subsection (3) trigger is ITC wrongly availed and utilised, with a separately notified rate capped at 24%; calculation manner is prescribed.
Overdue tax
A person who fails to pay tax by the prescribed deadline pays interest for the unpaid period at the notified rate, capped by the Act at 18%.
Late-filed return cash component
For qualifying supplies declared in the relevant section 39 return filed late, interest applies to the portion of tax paid by debiting the cash ledger. This proviso does not apply when that return is furnished after commencement of proceedings under section 73, 74 or 74A for that period.
Calculation start
Interest on unpaid tax is calculated in the prescribed manner from the day after tax was due.
Wrong ITC
The subsection (3) trigger is ITC wrongly availed and utilised, with a separately notified rate capped at 24%; calculation manner is prescribed.
Practical checklist
Do
- Identify original tax due date and actual payment date.
- Check whether the late-return cash-ledger proviso applies or proceedings had begun.
- For disputed ITC, test both availment and utilisation.
- Use the applicable notified rate and current calculation Rules.
Avoid
- Treat a statutory rate ceiling as the notified live rate.
Frequently asked questions
Is every incorrectly availed ITC balance immediately subject to subsection (3) interest?
The statutory trigger is credit wrongly availed and utilised; apply the prescribed calculation to the facts.
Need help applying this provision to your situation?
Contact BizeneedLast updated 10 October 2026