GST Valuation to include Interest , Penalty , late fee : Issues

By | August 9, 2017
(Last Updated On: August 9, 2017)

Suggestions on GST Acts (July 2017) by Institute of Chartered Accountants of India

17. Inclusion of Interest, penalty etc. in Value of Supply

Section 15(2)(d) of CGST Act provides that the value of supply shall include interest or late fee or penalty for delayed payment of any consideration for any supply.

Issue

In most of the cases the amount of interest or penalty is not known at the time of supply. To be required to be included in the valuation at the time of supply is a cumbersome task.

Suggestions

 It is suggested that clause d of section 15(2) be omitted.
 Alternatively, if it needs to be essentially included, it might be considered to shift this clause to section 31 as one of the circumstances requiring the issuance of debit note

Read ICAI Suggestions on GST Act to Govt : July 2017

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About CA Satbir Singh

Chartered Accountant having 12+ years of Experience in Taxation , Finance and GST related matters and can be reached at Email : Taxheal@gmail.com

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