Late Payment Interest collected on Exempted Supply
This query is : Resolved
23 April 2021
Dear Sir,
If a Governmental Agency is providing exempted goods and charging late payment interest from the customers will the interest be covered under GST?
Outward supply is wholly exempt.
Please advise
If a Governmental Agency is providing exempted goods and charging late payment interest from the customers will the interest be covered under GST?
Outward supply is wholly exempt.
Please advise
CA Altamush Zafar
(Expert)
24 April 2021
Technically Yes, GST applicable on charges on late payment. However there has been clarifications and rulings in case of banks that since main interest is exempt therefore penal interest on late payment of installment will also be exempt.
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