Expense

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This discussion addresses how a Non-Banking Financial Company (NBFC) should record interest payments to investors as expenses in their books. Since investors typically don't issue invoices for interest received, the recommended method is to use a payment voucher. This approach is suitable for B2C transactions and is compliant with GST regulations, as interest payments are generally outside its scope.

Kavita Bisht

Kavita Bisht (Querist)

09 February 2020 One NBFC generates their revenue as interest from borrowers and they need to pay this interest to their investors so how they have to show this amount as expenses in books withou invoice??

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

09 February 2020 Raise payment voucher and book it as expenses.

CS,CA F,Numrologi TusharSampat

CS,CA F,Numrologi TusharSampat (Expert)

09 February 2020 Invoice needs to be made in this case.

Kavita Bisht

Kavita Bisht (Querist)

09 February 2020 Thanks to all.
but how to be made invoices because these transactions are B2C.
and that transfer amount is 40k, so how to show it expense in books?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

10 February 2020 Such interest payments are outside the purview of GST hence no invoice need to be raised book expenses through payment voucher.
Normally invoice to be raised by persons receiving the payment. In this case no invester raise any invoice.

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