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waiver of interest on delayed payment

Shelly (student) (95 Points)

06 July 2018

is gst applicable if as per contract interest was payable on delayed consideration but later on interest was waived?

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CA ABHAY GUPTA (Practice) (3235 Points)
Replied 06 July 2018

GST on interest received from debtors of a business will be applicable. In other words, interest charged and collected by a supplier on a supply has to be included in the transaction value and GST is liable to be paid on the same.
If a supplier decides to waive off the interest which is due from a customer on delayed payment, GST will not be applicable on the interest.

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