Late Delivery Charges

[Kaustubh Karandikar]

XYZ is receiving from PQR amount towards late delivery charges which will fall under the category of agreeing to the obligation to refrain from an act, or to tolerate an act or a situation, or to do an act and therefore XYZ will be liable to pay GST on the amount received. In this example, recipient of service is XYZ or PQR?

AI Summary

Debate on GST Applicability for Late Delivery Charges: Is PQR the Service Recipient under IGST Act Section 13(2)? A discussion on a forum addresses whether late delivery charges paid by PQR to XYZ are subject to Goods and Services Tax (GST). It is debated that XYZ, by imposing late delivery charges, is providing a service to PQR, making PQR the service recipient. If PQR is outside India, GST may not apply under Section 13(2) of the IGST Act. Participants also discuss whether these charges fall under Section 15(d) of the CGST Act, 2017, which includes penalties for delayed payment in the value of supply. The consensus leans towards PQR being the service recipient.