GST on surcharge for delayed payment

[Tax DEPTT]

If invoices/debit notes are issued for surcharge for delayed payment in telecommunications sector, is GST to be applied on such invoices/debit notes for surcharge? Is the GST on surcharge to be deposited on Billing or on collection? Kindly intimate the provisions of GST Act/Rules in this regard.

AI Summary

GST on Telecom Late Fees: Billed or Collected? Section 15(2)(d) and Section 12(6) of CGST Act Explained. A query was raised regarding the application of GST on surcharges for delayed payments in the telecommunications sector, specifically whether GST should be applied at the time of billing or collection. Three responses were provided. One stated that the surcharge, considered a penalty or late fee, should be part of the taxable value under Section 15(2)(d) of the CGST Act, making GST applicable. Another response indicated that GST should be charged on billing. The final response clarified that GST is payable upon collection, as per Section 12(6) of the CGST Act, which specifies that the time of supply is when the supplier receives the additional value.