The Goods and Services Tax Network (GSTN) has rolled out multiple enhancements in the GSTR-3B return filing process, effective from the January 2026 tax period. The changes primarily relate to interest computation on delayed tax payments, auto-population of tax liability breakups, flexibility in ITC utilisation, and recovery of interest from cancelled taxpayers.
Revised Interest Computation Aligns With Rule 88B
One of the most impactful changes is the enhancement in interest calculation under Table 5.1 of GSTR-3B. From the January 2026 tax period onwards, interest will now be computed by giving the benefit of the minimum cash balance available in the Electronic Cash Ledger (ECL) from the due date of return filing till the date of actual tax payment (offset). This modification aligns the portal’s computation mechanism with the proviso to Rule 88B(1) of the CGST Rules, 2017.
Under the revised system, interest will be calculated using the following formula:
Interest = (Net Tax Liability – Minimum Cash Balance in ECL from due date to date of debit) × (Number of days of delay / 365) × Applicable Interest Rate
The system-computed interest will be auto-populated in Table 5.1 and will be non-editable downward, ensuring that the minimum interest payable is mandatorily discharged. However, taxpayers will continue to be responsible for self-assessing their correct interest liability and may revise the auto-populated figure upwards where required. Notably, interest pertaining to delayed returns of January 2026 will reflect in the February 2026 GSTR-3B.
Auto-Population of Tax Liability Breakup Table
To improve accuracy and transparency in reporting, GSTN has introduced auto-population of the Tax Liability Breakup Table in GSTR-3B. This table captures tax pertaining to supplies of earlier tax periods that are reported and paid in the current return.
From January 2026 onwards, the portal will auto-populate this breakup based on the document dates of supplies declared in GSTR-1, GSTR-1A, or IFF, where the corresponding tax liability is discharged in the current GSTR-3B. This enhancement aims to assist taxpayers in correctly reporting past-period liabilities and ensuring consistency across returns.
The auto-populated breakup can be accessed through:
Login → GSTR-3B Dashboard → Table 6.1 (Payment of Tax) → Tax Liability Breakup
Greater Flexibility in ITC Utilisation
Another taxpayer-friendly change relates to cross-utilisation of Input Tax Credit (ITC). From January 2026, once IGST ITC is fully exhausted, taxpayers will be allowed to discharge IGST liability using available CGST and SGST ITC in any sequence. This provides additional flexibility in tax payment and eases working capital pressures for businesses.
Interest Recovery Through GSTR-10 for Cancelled Registrations
GSTN has also addressed a long-standing gap in interest recovery for cancelled taxpayers. Where a taxpayer’s registration is cancelled and the last applicable GSTR-3B is filed belatedly, the interest arising from such delay will now be levied and collected through the Final Return (GSTR-10). This ensures complete recovery of statutory dues even after cancellation of registration.
Advisory Emphasises Accuracy and Self-Assessment
While the new system-driven features are intended to reduce errors and improve compliance, GSTN has clarified that auto-populated values are only suggestive. Taxpayers must rely on their own records and statutory provisions to ensure correctness and make upward adjustments wherever necessary.
Overall, these enhancements mark a decisive step towards aligning portal functionalities with the CGST Act and Rules, particularly Section 50 and Rule 88B, while simultaneously improving ease of compliance and reducing litigation arising from interest computation disputes.
