We have purchased Cigarettes for which payment has been made beyond due date of payment and therefore interest on delayed payment has been charged by company. Company has issued debit note where HSN code of cigarette is mentioned and description mentioned as Interest on delayed payment....
Whether it is correct treatment by company and how to treat it in our GST return??
GST on Interest for Delayed Payments: Section 15 Confirms Inclusion in Taxable Value for Cigarette Purchases A discussion forum addressed the issue of Goods and Services Tax (GST) on interest for delayed payments. A company charged interest on delayed payment for cigarette purchases and issued a debit note. The query sought clarification on whether this treatment was correct and how to report it in GST returns. Responses confirmed that the company's treatment was correct, as per Section 15 of the CGST Act, 2017, which mandates including interest on delayed payments in the taxable value for GST purposes. It was clarified that interest earned on bank accounts is not part of the taxable value. (AI Summary)
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