Why interest on delayed payment of consideration is assumed to be inclusive of gst .is there any specific provision regarding this.\r\n
Main Category: GST |Sub Category: Others |Reply Count: 1 |
Replies:-
BMC Associates says Replied on 4th July,2026 09:48 AM
Interest on delayed payment of consideration is treated as part of the value of supply and is therefore subject to GST. This treatment is based on a specific legal provision under the GST law.
As per Section 15(2)(d) of the CGST Act, 2017, the value of a supply includes interest, late fee, or penalty for delayed payment of any consideration for the supply. Since GST is payable on this additional amount, the interest recovered for delayed payment is considered inclusive of GST, unless the invoice or agreement specifically states that GST will be charged separately on such interest.
Therefore, there is a clear statutory provision governing the GST treatment of interest on delayed payments.
For expert assistance on GST valuation, compliance, and tax planning, businesses often consult experienced chartered accountant firms in gurgaon. A qualified chartered accountant gurgaon, trusted ca firm in gurgaon, or professional ca in gurgaon can provide accurate guidance on GST provisions and ensure proper compliance.
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BMC Associates says Replied on 4th July,2026 09:48 AM
Interest on delayed payment of consideration is treated as part of the value of supply and is therefore subject to GST. This treatment is based on a specific legal provision under the GST law. As per Section 15(2)(d) of the CGST Act, 2017, the value of a supply includes interest, late fee, or penalty for delayed payment of any consideration for the supply. Since GST is payable on this additional amount, the interest recovered for delayed payment is considered inclusive of GST, unless the invoice or agreement specifically states that GST will be charged separately on such interest. Therefore, there is a clear statutory provision governing the GST treatment of interest on delayed payments. For expert assistance on GST valuation, compliance, and tax planning, businesses often consult experienced chartered accountant firms in gurgaon. A qualified chartered accountant gurgaon, trusted ca firm in gurgaon, or professional ca in gurgaon can provide accurate guidance on GST provisions and ensure proper compliance.
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