whether gst apply or not

GST not levied on Interest other than Late payment interest paid

GST is exempted on interest on loans/advances

Extract as under-12/2017-CT(rate)

Services by way of—
(a) extending deposits, loans or advances in so far as the consideration is represented by way of interest or discount (other than interest involved in credit card services); 

“interest” means interest payable in any manner in respect of any moneys borrowed or debt incurred (including a deposit, claim or other similar right or obligation) but does not include any service fee or other charge in respect of the moneys borrowed or debt incurred or in respect of any credit facility which has not been utilised