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of <h1>GST Clarification: Penal Interest on Delayed EMI Payments Taxable for Sellers, Exempt for Third-Party Lenders.</h1> The circular clarifies the applicability of GST on additional penal interest for delayed EMI payments. It distinguishes between two scenarios: when a seller charges penal interest directly on a product sale, and when a third-party lender charges it on a loan. In the first scenario, the penal interest is taxable as part of the product's value. In the second scenario, the penal interest is exempt from GST under specific notifications, as it qualifies as interest. The circular further clarifies that such penal interest does not fall under the taxable category of liquidated damages as per the TNGST Act.
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