INTEREST ON LATE PAYMENT RECEIVED OF SALE, Goods and Services Tax - GST

[NAREN KHATRI]

HI.. SIR/S..

NEED TO ISSUE DEBIT NOTE TOWARDS INTEREST ON LATE PAYMENT RECEIVED TOWARDS SALES.

IS THIS INTEREST LIABLE TO GST..??

THANKING YOU IN ADVANCE..

Posts / Replies

[Rajagopalan Ranganathan]

Sir,

As per Section 15 (2) (d) of CGST Act, 2017 " the value of supply shall include interest or late fee or penalty for delayed payment of any consideration for any supply." Therefore any interest collected on late payment received towards sales is liable to GST.

[NAREN KHATRI]

Thank you very much sir.. for quick reply.

will you let me know GST % for the said interest..? so, i shall make debit note accordingly with interest + gst.

[KASTURI SETHI]

Yes. GST is applicable on interest under Section 15 of CGST Act.

[Rajagopalan Ranganathan]

Sir,

The rate of gst will be the rate applicable to the goods/services supplied by you.

[Himansu Sekhar]

The interest will be a part of the value. The same rate as that of the goods