TaxTMI 
TaxTMI 
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?
Late Delivery Charges
25 Nov 2018 
8 Replies 
14977 Views Asked by
Late delivery charges treated as supply; recipient is service payer, valuation includes late fees and place of supply follows original transaction.
Late delivery charges can constitute a supply of service where XYZ is treated as supplier and PQR as service recipient because XYZ is the party being tolerated or against whom an obligation is agreed. Late fees and penalties are includible in the value of the supply for GST valuation, and the place of supply for such charges is generally aligned with the original supply. If the payer is located outside India, IGST applicability and cross border tax consequences must be examined. (AI Summary)
Late delivery charges can constitute a supply of service where XYZ is treated as supplier and PQR as service recipient because XYZ is the party being tolerated or against whom an obligation is agreed. Late fees and penalties are includible in the value of the supply for GST valuation, and the place of supply for such charges is generally aligned with the original supply. If the payer is located outside India, IGST applicability and cross border tax consequences must be examined. (AI Summary)