A company late payment to supplier. Supplier has raised a debit note to us along with GST @ 18% against delayed in payments. GST Applicabe this transcation ??? if yes . which rate ?? then this amount under which HSN code.
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Intrest on late payment to supplier
Replies (3)
No...
GST not applicable for delayed payment related interest...
GST not applicable for delayed payment related interest...
As per Section 15 of CGST Act, 2017 interest on delayed payment is part of taxable value/transaction value(on which GST is to be computed and paid). In GST return declare the taxable value including interest on delayed payment.
Just for your information normal interest which we earn on our bank account is not to be treated part of taxable value.
Yes this interest is taxable as per section 15(Value of supply provision).
Same HSN code and rate is applicable against the supply of which interest is received. For example:- You sold a bike of Rs. 128000/- with HSN code 4444(say) having tax rate 28%(say). Now you dont receive the payment on time so you charge interest @ 18%(Rs 100000*18%=18000) by raising debit note. Debit note will contain same HSN and rate i.e. 4444 and 28% respectively. Amount will be 18000+28%of18000=23040/-
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