GST on interest on loan

Kaustubh Ram Karandikar (Corporate Consultant- Central Excise & Service Tax)   (519 Points)

16 July 2021  

PQR (Mexico) is a Subsidy of XYZ (India). Loan had been given in US$ by XYZ (India) to PQR (Mexico) and the principal amount along with interest is paid back to XYZ (India) again in US $ and the same is deposited in the Indian bank having foreign currency account. Is XYZ required to pay GST on the interest amount received from PQR?