Mohan & Chandrasekhar, Chartered Accountants
Chartered Accountants
Hosur | Bengaluru | Chennai
ADVISORY CIRCULAR
GSTN Advisory: System Glitch in Interest Auto-Computation for February 2026 — Taxpayers Must Re-Compute Before Filing March 2026 GSTR-3B
Based on GSTN Advisory dated 6th March 2026 on Re-Computation of Interest under Table 5.1 of GSTR-3B
BACKGROUND
The GST Network (GSTN) has issued an important advisory dated 6th March 2026 alerting taxpayers to a technical glitch that has resulted in incorrect auto-computation of interest for the February 2026 tax period, as reflected in Table 5.1 of the March 2026 GSTR-3B. Taxpayers affected by this glitch are required to take immediate corrective action before filing their GSTR-3B for March 2026.
HOW THE SYSTEM COMPUTES INTEREST — A BRIEF OVERVIEW
As a facilitation measure, the GST Portal auto-calculates interest on delayed filing of GSTR-3B based on the tax liability discharged by the taxpayer and the breakup declared in the “Tax Liability Breakup, As Applicable” table. This system-computed interest is auto-populated in Table 5.1 of the subsequent period’s GSTR-3B — a mechanism similar to how late fees are auto-calculated after filing and collected in the next return period.
The detailed breakup of how this interest is computed can be verified by accessing the System Generated GSTR-3B PDF through the following navigation path on the GST Portal:
Login → Return Dashboard → Select Return Period → GSTR 3B → Prepare Online → System Generated GSTR 3B PDF
THE TECHNICAL GLITCH — WHAT WENT WRONG
GSTN has identified that, due to a technical glitch, the interest auto-computed for February 2026 and appearing in Table 5.1 of the March 2026 GSTR-3B may have been incorrectly calculated for certain taxpayers. Specifically, the system failed to extend the benefit of the minimum cash balance available in the Electronic Cash Ledger, as mandated by the proviso to Rule 88B(1) of the CGST Rules, 2017.
Rule 88B(1) of the CGST Rules, 2017 governs the manner of computation of interest on delayed payment of tax. The proviso to Rule 88B(1) prescribes that while computing interest, the minimum cash balance maintained in the Electronic Cash Ledger during the relevant period shall be taken into account as a set-off against the outstanding tax liability, thereby reducing the interest burden. The system, due to the glitch, has ignored this relief for some taxpayers, leading to an inflated interest figure in Table 5.1.
WHAT TAXPAYERS MUST DO — STEP-BY-STEP ACTION
GSTN has provided a built-in remedy on the portal itself. Taxpayers are advised to take the following steps before filing their March 2026 GSTR-3B:
- Step 1 — Check for Discrepancy: Before filing March 2026 GSTR-3B, carefully review the interest auto-populated in Table 5.1. Cross-verify this figure with the System Generated GSTR-3B PDF, which provides the complete breakup of interest computation.
- Step 2 — Click “RE-COMPUTE INTEREST”: If a discrepancy is observed or if you are unsure whether the interest has been correctly computed, click the “RE-COMPUTE INTEREST” button available under Table 5.1 of GSTR-3B on the portal. The system will recalculate the interest based on the latest and updated parameters, including the correct benefit of the Electronic Cash Ledger balance under Rule 88B(1).
- Step 3 — Verify the Revised Figure: After re-computation, download the updated System Generated GSTR-3B PDF to view the revised interest amount. The revised interest will also be displayed on hovering over the respective field in Table 5.1.
- Step 4 — Manually Update Table 5.1 if Required: Based on the revised figure, manually edit the interest values already auto-populated in Table 5.1. Critically, the manually entered interest value must not be less than the recomputed interest shown in the system generated PDF.
- Step 5 — Proceed to File: Only after verifying and updating the interest figures, proceed to confirm and file the March 2026 GSTR-3B.
KEY LEGAL PROVISION — RULE 88B(1) OF THE CGST RULES, 2017
Rule 88B of the CGST Rules, 2017, inserted with effect from 26th December 2022 (vide Notification No. 26/2022-Central Tax dated 26.12.2022), sets out the methodology for computing interest under Section 50 of the CGST Act, 2017. The rule distinguishes between cases where returns have been filed belatedly and cases involving fraudulent or wilful misstatement.
Under Rule 88B(1), in cases of delayed filing of GSTR-3B (other than those covered by Section 50(3) involving fraud, suppression, etc.), interest is to be computed on the portion of the tax that was paid belatedly from the electronic cash ledger — after excluding the amount of input tax credit that was available in the Electronic Credit Ledger. The proviso to Rule 88B(1) further provides that if any minimum cash balance was maintained in the Electronic Cash Ledger during the intervening period, appropriate benefit must be extended while computing interest. It is the non-application of this proviso that has caused the inflated interest figure for some taxpayers.
PRACTICAL IMPLICATIONS AND OUR ADVISORY
This advisory from GSTN is particularly significant for taxpayers who:
- Filed their February 2026 GSTR-3B after the due date;
- Had cash balances in their Electronic Cash Ledger during the intervening period of delayed filing; and
- Are now seeing a higher-than-expected interest auto-populated in Table 5.1 of their March 2026 GSTR-3B.
Taxpayers who file the March 2026 GSTR-3B without re-computing the interest may inadvertently pay excess interest, which may thereafter be difficult to recover or adjust. It is therefore strongly recommended that all taxpayers — particularly those with delayed filing history — verify the interest figure before filing.
It may also be noted that, while the interest amount is auto-populated by the system, the responsibility for correct self-assessment ultimately rests with the taxpayer. The GST Portal’s facilitation tools are an aid, not a substitute for diligent compliance review.
IMPORTANT CAUTION
As per the advisory from GSTN, the manually edited interest value in Table 5.1 shall not be less than the recomputed interest appearing in the system generated GSTR-3B PDF. Any deliberate under-declaration of interest liability could attract scrutiny, penalties, or demand proceedings under Section 50 read with Section 73/74 of the CGST Act, 2017.
CONCLUSION
We urge all our clients and taxpayers to review their March 2026 GSTR-3B with specific attention to Table 5.1 before filing. The “RE-COMPUTE INTEREST” functionality is available on the portal and must be used wherever there is any doubt about the correctness of the auto-populated interest. Our office is available to assist you in this exercise. Please feel free to reach out to us.
DISCLAIMER: This Advisory Circular has been prepared for information purposes only based on the GSTN Advisory dated 6th March 2026. It does not constitute legal advice. Taxpayers are advised to refer to the applicable provisions of the CGST Act, 2017, CGST Rules, 2017, and relevant notifications for compliance requirements. For specific guidance on your facts and circumstances, please consult our office.
For Mohan & Chandrasekhar, Chartered Accountants
CA Chandrasekhar Kutty
Partner
Hosur | Bengaluru | Chennai