GST on additional interest charged for default in instalment payment by customer : CBIC Clarify

By | June 4, 2018
(Last Updated On: June 4, 2018)

Is GST required to be paid on  additional interest charged in case  of default in instalment payment by  the customer?

As per Section 15(2) of CGST Act, 2017, the value of supply includes, inter alia,  interest for delayed payment of any consideration for any supply.

Additional Interest charged for default in payment of instalment in respect of any supply, which is subject to GST, will be includible in the value of such supply and therefore would be liable to GST.

Q 45 of GST FAQs on Financial Services Sector published by CBIC

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