GST ON INTEREST ON DELAYED PAYMENT

[ROHIT GOEL]

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??

AI Summary

GST valuation includes interest on delayed payment, requiring suppliers to include that interest in taxable value and returns.
Interest charged for delayed payment on a supply must be included in the taxable value for GST; such interest, late fee or penalty forming part of consideration should be aggregated with the transaction value and declared in GST returns, while ordinary bank interest unconnected to the supply is excluded.