GST on penal interest: penal interest charged by a seller is taxable, while financier charged interest on loans is exempt. Clarifies GST treatment of penal interest on delayed EMIs: penal interest charged by the goods seller is included in the value of the taxable supply and is taxable, whereas penal interest charged by a financier in connection with a loan qualifies as interest for loan services and is exempt; non interest service fees or other charges relating to loan facilitation 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: penal interest charged by a seller is taxable, while financier charged interest on loans is exempt.
Clarifies GST treatment of penal interest on delayed EMIs: penal interest charged by the goods seller is included in the value of the taxable supply and is taxable, whereas penal interest charged by a financier in connection with a loan qualifies as interest for loan services and is exempt; non interest service fees or other charges relating to loan facilitation are not exempt.
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