GST on Interest Income from Private concern

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This query is : Resolved

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This discussion clarifies whether Goods and Services Tax (GST) is applicable on interest earned from advance payments made to TATA Motors for vehicle purchases. While the interest is received from TATA Motors, it's argued that GST is not leviable as it doesn't constitute a supply of goods or services. The interest is considered a return on an advance for goods, and potentially exempt under Notification No. 12/2017. Charging GST again would lead to double taxation.

Reena

Reena (Querist)

12 October 2021 We are an authorized dealer for TATA MOTORS Passengers cars, We should pay sum amount in advance to Invoice the vehicle. They are giving Interest at the end of the month for what is the balance amount available with them. For this Interest they deduct the TDS also.

Please confirm that we should pay the GST for that interest Amount.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

12 October 2021 Yes, it is in the course of your business ...

Reena

Reena (Querist)

12 October 2021 Sir Please confirm the Rate of Tax

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

12 October 2021 18% ...... (9% CGST + 9% SGST)

Reena

Reena (Querist)

12 October 2021 Thank You So much sir

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

12 October 2021 Most Welcome ...

CA Pradeep Sharma

CA Pradeep Sharma (Expert)

12 October 2021 In my point of view no GST will be leviable.................... because you are not giving/providing any supply of goods or services...........You have given only advance for goods purchase........ and interest on any kind of advance is exempt under NN 12/2017....................While TATA motors supplying you goods...............any interest paid by them include in their value of supply (Definitely) u/s 15(2)(d)................. if you are again paying GST on same then it will be double tax on same supply...............So my point of view there will be no GST............

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