GSTN Enhances GSTR-3B Interest and ITC Functionality from Jan 2026

GSTN Advisory, Dated 30-01-2026

The Goods and Services Tax Network (GSTN) has issued an advisory announcing system enhancements in the filing of GSTR-3B, applicable from the January-2026 tax period onwards. The changes primarily relate to interest computation, auto-population of tax liability, and flexibility in ITC utilisation, in line with the CGST Rules.

1. Revised Interest Computation in Table 5.1

GSTN has updated the interest calculation mechanism in Table 5.1 of GSTR-3B to extend the benefit of the minimum cash balance available in the Electronic Cash Ledger. This benefit will be considered from the due date of return filing up to the actual date of tax payment, in accordance with the proviso to Rule 88B(1) of the CGST Rules.

For delayed filing of GSTR-3B for the January-2026 tax period, the applicable interest will be system-computed and auto-populated in the February-2026 GSTR-3B.

2. System-Computed Interest – Minimum Payable Amount

The interest amount computed by the portal will be non-editable downward and will represent the minimum interest payable. However, taxpayers will have the option to revise the interest amount upward, where required, based on self-assessment and factual considerations.

3. Auto-Population of Tax Liability Break-up Table

The GST portal will now auto-populate the Tax Liability Break-up Table in GSTR-3B based on document dates declared in GSTR-1, GSTR-1A, or the Invoice Furnishing Facility (IFF). This enhancement applies to cases where the underlying supply relates to earlier tax periods but the tax liability is discharged in the current period, improving consistency between outward supply reporting and tax payment.

4. Flexibility in Utilisation of ITC for IGST Liability

Once the available IGST Input Tax Credit (ITC) is fully exhausted, the system will permit taxpayers to discharge IGST liability using available CGST and SGST ITC in any order. This provides enhanced flexibility in credit utilisation and aligns the portal functionality with statutory provisions.

5. Interest Recovery for Cancelled Taxpayers

In cases involving cancelled registrations, where the last applicable GSTR-3B is filed after the due date, the applicable interest will be levied and recovered through GSTR-10, ensuring proper recovery of dues post-cancellation.

6. Compliance Implications

These enhancements reinforce GSTN’s focus on automation, rule-based interest computation, and improved return accuracy. Taxpayers should review their return filing timelines, cash ledger balances, and ITC utilisation strategies to ensure alignment with the revised system functionality effective from January 2026.

Click Here To Read The Full Update