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Interest received on delayed payment

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MAYUR MINAJGI

57 Points Posted on 04 September 2023

Assesse recd internet and credited to Profit and loss Account GST officer asking to pay GST on such income from 17-18 to 21-22 FY

Replies (3)

Quick Summary

This discussion clarifies that GST is indeed payable on interest received for delayed payments. According to Section 15 of the GST Act, such interest is considered part of the transaction value. Therefore, GST officers are correct in their assessment that GST should be charged on this income.

CS Advocate Abhishek Goyal

M Com FCS LLB M-AIMA

11027 Points Posted on 04 September 2023

Yes GST is payable as per section 15 it is treated as part of transaction value. So if any interest is charged on delayed payment from debtors it is chargeable to GST.

RAJA P M

"Do the Right Thing...!!!"

77833 Points Posted on 04 September 2023

Yes I agreed with Mr CS Advocate Abhishek Goyal,

GST officer is correct.
GST is applicable for Interest on delayed payment...

Aashok Kumar Sharma

Finance/Compliance Consultant

75870 Points Posted on 08 November 2026

GST on interest for delayed payment from customers:
• Interest charged to customers for delayed payment of consideration for a supply is part of the value of that supply (Sec 15(2)(d)), taxable at the rate of the goods or services.
• If the interest is on a separate loan or advance (not linked to a supply), it's exempt (interest on loans, Notf 12/2017 Sl. 27).
• So the officer is right if the interest is for late payment of invoices. Pay GST on it (issue a debit note or invoice), with interest for the delay. The recipient can claim ITC.