GST on penal interest: taxable when included in value of goods but exempt when charged by lender as interest. Clarification holds that penal interest included in the consideration for a taxable supply of goods must be included in the value of that supply and is taxable, whereas penal or additional interest charged by a separate lender for extending loans falls within the exemption for interest on loans and is not subject to GST; service fees or other non-interest charges by a lender are not exempt.
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
GST on penal interest: taxable when included in value of goods but exempt when charged by lender as interest.
Clarification holds that penal interest included in the consideration for a taxable supply of goods must be included in the value of that supply and is taxable, whereas penal or additional interest charged by a separate lender for extending loans falls within the exemption for interest on loans and is not subject to GST; service fees or other non-interest charges by a lender are not exempt.
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