Gst liability on interest for delayed payment between nonfincial companies

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40 Points Posted on 20 July 2021
I am a wholesale textile trader and due to corona disruptions I am forced to pay interest to supplier textile mills on account of delayed payments. Similarly I am also collecting interests from my customers for delayed payments. Are such interest transactions liable to GST?
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On 20 July 2021 at 12:06 Report
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This discussion clarifies whether GST is applicable on interest charged or paid due to delayed payments between non-financial companies, specifically for textile traders. The consensus is that GST is indeed leviable on such interest, as it is considered part of the transaction value according to Section 15(2)(d) of the CGST Act.

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CMA
13117 Points Posted on 22 July 2021

Yes, GST is leviable on such interests.

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On 22 July 2021 at 16:16
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GST Consultant
15986 Points Posted on 22 July 2021

Check section 15(2)(d) of CGST Act on valuations. Such interest and penalty forms part of value and are taxable.

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On 22 July 2021 at 20:32

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