Interest payable with sgst chat and cess

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This discussion covers the accounting treatment for interest charged by a supplier on delayed payments, including applicable CGST, SGST, and cess. The recommended approach is to book this as 'other expenses'. If Input Tax Credit (ITC) is available for the taxes, they can be debited as an asset; otherwise, both the interest and taxes should be expensed.

A Srinivas

A Srinivas (Querist)
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08 June 2021 supplier charged interest for delayed payment as below
Supplier sent a DEBITNOTE
DEBITNOTE DETAILS
interest payable 4368.23
cgst on interest @14% 611.55
sgst on interest @14% 611.55
cess 218.41

total payable by the dealer to supplier is 5809.74
please tell how to account for and creation of which type of voucher in tally software

CA Altamush Zafar

CA Altamush Zafar (Expert)
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08 June 2021 Account it as other expenses on which gst applicable. If itc available then taxes will be debited as asset. If itc not available then taxes will be expenses along with interest.