GST to be charged on interest received from buyer of goods for late remittance of purchase proceeds?
As per the payment terms, if payment delayed by 30 days, the buyer has to pay to the supplier interest on delayed payment of purchases at 5% per month.
I want to know whether any GST needs to be charged on interest received from buyer.
As per section 15(2)(d) of CGST act, Value of supply includes any interest or late fee or penalty for delayed payment of any consideration for any supply.
Hence interest received on delayed payment will attract GST. and GST will be applicable at the rate charged on Invoice.
Yes, You need to levy GST,
As per section 15(2)(d) of CGST act, Value of supply includes any interest or late fee or penalty for delayed payment of any consideration for any supply.
Hence interest received on delayed payment will attract GST. and GST will be applicable at the rate charged on Invoice.